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Following a drop in 2020, U.S. corporate share buybacks are expected to bounce back this year, said Fitch Ratings.

In a new report, the rating agency forecasted that share buybacks by non-financial U.S. corporations will return to more normal levels in 2021, “as earnings and cash flow recover from pandemic-driven lows.”

Fitch noted that buybacks resumed quickly in 2009, in the wake of the global financial crisis, “and a similar pattern is likely to emerge in 2021 as the coronavirus vaccine rollout supports economic recovery.”

In a typical year, companies devote about 2% of revenues to share buybacks, Fitch reported — yet in times of economic stress, that proportion drops.

For instance, in the first nine months of 2020, buybacks made up just 0.7% of revenues, “as companies focused on preserving liquidity.”

Fitch did take a number of negative rating actions in 2020 due to share repurchase activity, it said, largely involving investment-grade companies using debt to finance buybacks.

As buyback activity returns to more typical levels, Fitch said that it expects this will be credit-neutral for most companies. Yet, activity that dents corporate credit quality could cause “negative outlook revisions and downgrades.”