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Goldman Sachs Cuts Estimates and Target on Exxon (XOM) After XTO Deal

June 28, 2010 8:56 AM EDT
XOM Hot Sheet
Rating Summary:
    6 Buy, 8 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 20 | Down: 11 | New: 38
Goldman Sachs lowered estimates and its price target on Exxon Mobil Corp. (NYSE: XOM) from $70 to $65, following the all-stock acquisition of XTO Energy on June 25. The firm is sticking with a Neutral rating.

2010 EPS went from $6.10 to $5.80, 2011 went from $8.05 to $7.70, 2012 went from $9.50 to $9.00 and 2013 went from $8.35 to $7.80.

The firm said the acquisition casts doubt on the sustainability of Exxon's historical return on capital advantage. In addition, Exxon has now raised questions as to whether the deal signals a less attractive legacy resource base than previously assumed, according to the firm.

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