Overseas Shipholding rises after analyst reiterates 'Buy'

NEW YORK—Shares of Overseas Shipholding Group Inc. rose Thursday, as a Jefferies & Co. analyst reiterated his "Buy" rating on the stock, saying the crude-oil tanker operator will benefit from rising spot charter rates this year.

Analyst Douglas Mavrinac suggested the stock is also currently undervalued. He raised his earnings estimates for 2008, suggesting that while the oil tanker market should be burdened this year by an influx of new ships and limited oil production growth, Overseas' strong balance sheet should provide it with the opportunity to grow through acquisitions.

The company said late Tuesday its first-quarter earnings leaped 33 percent from a year earlier, bouyed by rising time charter rates.

However, quarterly profit still failed to meet Wall Street's expectations, which Mavrinac blamed on lower-than-expected rates for Aframax vessels, few operating days for its Very Large Crude Carriers and one-time charges.

The analyst maintained his 12-month price target of $114.

Shares leaped $4.19, or 5.6 percent, to close at $79.45.