The purpose of the repurchase of shares by ExxonMobil (NYSE:XOM) has UBS (NYSE:UBS) concerned, as it's not to the end they hoped for after the highly dilutive acquisition of natural gas producer XTO.
"XOM repurchased $3 billion in shares in 3Q, and is increasing the pace to $5 billion in 4Q. However, XOM does not seem to intend to accelerate repurchases to retire the shares issued for the dilutive XTO acquisition; rather, the buyback will remain the “flywheel” to regulate excess cash. We are slightly revising ’10/ ‘11 EPS estimates from $5.77/$5.76 to $5.83/$5.96 primarily on the increased pace of the buyback and higher int’l R&M performance," said UBS.
Exxon closed Friday at $66.49, gaining $0.27, or 0.41 percent. UBS raised their price target on the energy giant from $63 to $65.
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