Is Europe’s €19 bln November buyback surge signaling a strong 2026?

Investing.com -- European companies repurchased €19.3 billion worth of shares in November 2025, near the peak level since 2017, signalling robust momentum into next year, according to analysts at Barclays in a note dated Tuesday.

Share repurchases accounted for 2.3% of European equity trading volume during the month, with energy firms and financial institutions generating more than 2.5% of volume through buybacks alone. Fourth-quarter execution has run above historical averages, the analysts noted.

The critical factor supporting continued strength is unexecuted capacity. Approximately 70% of 2026 buyback programmes remain outstanding, whilst Barclays’ probability model projects roughly €50 billion in fresh announcements during the first quarter. 

Financial services face a 30% probability of new programmes over the next three months, followed by energy at approximately 25%, technology at 20% and consumer staples at 18%.

Companies announced €250 billion in repurchase programmes during 2025, equivalent to roughly 2% of market capitalisation and consistent with historical norms. 

November announcements totalled €18 billion. Share repurchases have accounted for 1.8% of STOXX 600 trading volume throughout 2025, matching the previous three years.

Corporate balance sheets support sustained activity. Firms excluding financials maintain cash equal to 11% of assets, well above historical norms, whilst capital deployment remains subdued. 

Interest expenses as a percentage of total debt have likely peaked as European Central Bank rate cuts take effect. 

Improving purchasing managers’ indices should add further capacity for capital deployment, according to the report.

Barclays forecasts 8% earnings per share growth for European equities in 2026. Automotive manufacturers, telecommunications operators and energy companies currently offer the highest free cash flow yields amongst sectors.

Companies with substantial remaining authorisations include British American Tobacco with €10.9 billion, Swiss pharmaceutical giant Novartis with €8.6 billion, and Norwegian energy producer Equinor with €7.8 billion. 

Dutch semiconductor equipment maker ASML holds €5.3 billion, whilst Belgian-Brazilian brewer Anheuser-Busch InBev and German chemicals producer BASF have €5 billion and €3.9 billion respectively.

Regional variations show Norway, Portugal and the United Kingdom delivering the highest total shareholder yields over the past 12 months. Finland, Belgium and Norway hold the largest unexecuted capacity as percentages of announced programmes, whilst Greece appears most constrained.

Markets typically gain roughly 2% following peak blackout periods, which occurred in mid-October, suggesting constructive momentum through year-end as companies resumed repurchases.

The exception to this rule is France. In the 2026 budget, the government proposed increasing the buyback tax to 33%, weighing on French companies with active buyback programs.

The Senate faced a 15 December deadline, with its pro-business stance suggesting potential relief after voting down a corporate surtax on 29 November.

Barclays’ buyback announcements basket surged 24.3% over the past 12 months versus 11.9% for the STOXX 600 index. Barclays’ latest rebalancing increased exposure to financials, energy and industrials. 

High dividend strategies have staged a modest recovery against buybacks, narrowing the performance gap.

Dividend growth should complement buyback activity, with Barclays expecting 5% growth for STOXX 600 companies in 2026. Dividend futures for 2026-27 trade at historically high premiums versus consensus, signalling strong optimism. 

The brokerage projects total distributions will benefit from anticipated earnings recovery, supporting elevated shareholder return levels through next year.