DryShips' (NASDAQ:DRYS) Cyclical Fleet Growth Management Questioned by Goldman (NYSE:GS)

Goldman Sachs (NYSE:GS) said they have concerns over the historical ability of DryShips (NASDAQ:DRYS) to manage the fleet growth during cyclical times, and maintain their "Neutral" rating on them whiel lowering their EPS estimates on them through 2012.

"Although we see attractive drill ship demand dynamics and view the proposed private transaction positively (as it would remove some uncertainty around drill ships financing); we remain Neutral rated given DRYS’s less positive record of managing fleet growth through the cycle and a higher risk premium given significant related party transactions," said Goldman.

EPS estimates for full year 2010 were dropped from $1.24 to $1.14, for full year 2011 from $1.21 to $1.18, and for full year 2012 from $1.47 to $1.43.

Dryships was trading at $6.21 , up by $0.33, or 5.66 percent as of 12:32 PM EST. Volume was over double the daily 3-month trading average already.

Morgan Stanley (NYSE:MS) raised their rice target on DryShips to $9.50, up from their prior rating of $9. They maintain a "Overweight" rating on them.