Avon OKs $2B Share Repurchase

| About: Avon Products, (AVP)
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Avon Products Inc. said late Thursday its board authorized a $2 billion share buyback over a five-year period once it completes its current buyback. The company has repurchased 26 million shares for $904 million under its current program. The company has about 433 million shares outstanding. "Today's announcement is indicative of the long-term health of our business and our ongoing commitment to enhance shareholders' return on their investment in Avon," CEO Andrea Jung said (see Q2 earnings call transcript). Citigroup analysts say the announcement reaffirms its belief that AVP will deliver a happier "Hello Tomorrow": "With roughly $900 million in cash, and our expectation for operating cash flow of over $800 million in 2007, today’s announcement reinforces our belief that AVP’s business is performing well; and, despite AVP’s significant investment spending, AVP can both drive top-line growth and return value to shareholders." It told clients in an OCt. 11 research note buying shares is Avon's best bet, giving the difficulty it has in finding fairly-priced synergistic acquisitions. Citi has a $47 target on the $37.50 stock.

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