Dahlman Rose Reducing Price Target On Overseas Shipholding (OSG)

Dahlman Rose & Co. is lowering its price target to $52 from $60 on Overseas Shipholding Group OSG after the tanker company reported weaker than expected earnings. In the report Dahlman Rose notes, "We have reduced our estimates to reflect seasonally weaker rates for 3Q10 and have conservatively assumed the FSO Africa will remain unemployed for the remainder of the year. We are maintaining our 7x forward CF target, which leads us to revise our price target to $52 as we project $7.50 in forward 12-month CFs versus $8.50 prior. While OSG is likely to face headwinds near-term, we believe its exposure to improving tanker market fundamentals during the next 18 months will be favorable for shareholders. Shares of Overseas Shipholding Group are significantly lower today, off $2.25‎ to $37.45.