Wells Fargo Downgrades Overseas Shipholding Group (OSG) to Market Perform; Sector Oversupply Remains A Material Headwind

Wells Fargo downgraded Overseas Shipholding Group (NYSE: OSG) to Market Perform, price target range lowered to $10-$12 from $17-$19.

Wells analyst says, "While we believe OSG remains relatively well positioned at this point in the tanker cycle, given its stabilized balance sheet and a more diversified asset base, we believe the stock will likely be range-bound over the near-to-intermediate-term, with a full recovery ultimately tied to a recovery in the broader tanker market."

"...That said, we believe OSG’s positioning is relatively better than that of FRO or GMR (both of whom recently restructured), with a relatively stable balance sheet (provided the final tranche of title XI financing is secured in Q1 and its unsecured accordion feature is available) and diversified asset base. While be believe downside risk is somewhat limited from here (about 20-25%), we expect the stock to remain range bound barring an unforeseen rate recovery or a strategic buyer. We revise our 2011 and 2012 EPS estimates to -$6.58 (from - $6.14) and -$4.18 (from -$2.37), respectively due to revised day rate and expense estimates."

For an analyst ratings summary and ratings history on Overseas Shipholding Group click here. For more ratings news on Overseas Shipholding Group click here.

Shares of Overseas Shipholding Group closed at $11.83 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Wells Fargo Downgrades Roku Inc. (ROKU) to Equal Weight
• RBC Capital Downgrades CareTrust REIT (CTRE) to Sector Perform
• Northcoast Downgrades Brinker Int'l (EAT) to Neutral