According to studies, how much do stock prices typically rise on average following the announcement of an open market stock repurchase?

The average rise in stock prices following an open market stock repurchase announcement, which is often cited as around 2%, reflects the market's optimistic view regarding such buybacks. When a company announces a repurchase, it signals to investors that management believes the stock is undervalued. This perceived confidence tends to bolster investor sentiment, often leading to an upward adjustment in stock prices.

Moreover, stock repurchases can also lead to a reduction in the number of shares outstanding, which can increase earnings per share (EPS), further enhancing the attractiveness of the stock to investors. As a result, the overall market response is generally positive, resulting in the typical average increase considered in studies being around 2%. This conclusion aligns with empirical research, demonstrating a consistent trend among publicly traded companies that undertake stock buybacks.