Wells Fargo (NYSE:WFC) initiated coverage on DryShips (Nasdaq:DRYS), starting them off a "Market Reform" rating.
The valuation range of the stock, which closed Tuesday at $4.04, was from $5 to $6.
Wells said "the overhang from DRYS's drillship exposure creates too much uncertainty to get constructive on the stock," adding, "the downside risks are too unpredictable given volatile macro sentiment and the potential headline risk associated with DRYS's unfinanced and unemployed drillship newbuilds."
The financial giant put an earnings per share estimate of $0.79 and a full-year estimate of $0.95. That's lower than a number of analysts are looking for.