Low Tax Rate on One-Time Item Contributes to ExxonMobil (XOM) EPS Beat; UBS Raises Price Target to $81
UBS reiterated a Neutral rating on ExxonMobil (NYSE: XOM), and raised the price target to $81.00 (from $77.00), following the company's 3Q earnings results. 3Q15 EPS fell 46% YoY to $1.01, above consensus of $0.89. A lower than expected tax rate related to a one-time item benefitted EPS by $0.04/share.
Analyst William Featherston commented, "1) reiterated its 2015 capex guidance of $34bn & 2016-17 spending target of <$34bn, as well as expectation for spending to trend below both figures due to cost savings and efficiency gains; 2) made no change to its 2015 production growth guidance of +2% YoY to 4.1 MMBoed (although liquids growth is trending above guidance offset by steeper declines in natgas); 3) repurchased $500MM in shares in 3Q and expects to repurchase another $500MM in 4Q; 4) acquired horizontal development rights in 48,000 acres in Midland Basin, boosting its Midland unconventional position to 135,000 net acres. We made very modest revisions to our estimates."
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Shares of ExxonMobil closed at $82.74 yesterday.