Adobe Systems ADBEhas announced a new share repurchase program. The company’s board of directors authorized buy back of shares worth up to $8 million. This will be executed through the fiscal year 2021 and funded from the future cash flow generation.
The repurchases are likely to be made through both public market and structured share repurchase agreements with the third parties.
The new share repurchase program is appreciably higher than its previous share repurchase authorization of up to $2.5 billion through the fiscal year 2019. This is reflects the company’s solid balance sheet and strong cash flow generation.
With the latest announcement, Adobe aims at enhancing the shareholders’ value and return. Further, the company will be able to lessen dilution from the stocks issued as compensation to its employees.
We believe that the continued share buybacks will increase optimism on the stock and consequently be lucrative to investors.
Coming to the price performance, shares of Adobe have returned 36.4% on a year-to-date basis, outperforming the industry’s rally of 12%.