The August buy‑back removed 552 k EQT ordinary shares from the market – roughly 1‑2 % of the total float (the programme caps at 5.5 m shares). With the capital structure unchanged, EPS will be lifted by the same proportion because net income is spread over fewer shares. If earnings for the quarter remain at today’s level, a 1‑2 % reduction in share count translates into a roughly 1‑2 % increase in EPS, turning a SEK X‑share EPS into about SEK X × 1.01‑1.02.
Because the market price normally does not move in lock‑step with a modest‑size buy‑back, the immediate effect on the price‑earnings ratio is a downward‑pressure on the P/E: the denominator (EPS) rises while the numerator (share price) stays roughly flat, so the multiple contracts. In practice, the market often rewards a share‑repurchase by nudging the price higher on the back of a “quality‑signal” narrative, which can offset the P/E compression and even produce a re‑rating if the “clean‑up” perception sharpens expectations for future cash‑flow generation.
Trading take‑away:
- The EPS bump is modest but automatic; it improves the headline profitability metric without any change to operating performance.
- The lowered share count and the buy‑back’s signaling effect tend to support the stock, especially on a short‑term bounce if the price has slipped during the execution window.
- Positionally, a long‑position on any pull‑back into the early‑September range is sensible, with the upside driven by both the mechanical EPS uplift and the potential for a higher‑multiple re‑rating if the market interprets the repurchase as a firm‑level confidence signal. Keep a stop just below the recent swing‑low (~SEK X) to guard against the broader market risk in the utilities/energy sector.