Update: Morgan Keegan Raising Price Target On Key Energy Services (KEG)

Morgan Keegan has an Outperform rating and is raising its price target on shares of Key Energy Services KEG to $23 from $19. In a note to clients, Morgan Keegan writes, "Key initiated a low double-digit price increase during Q1'11 that was only partially implemented by quarter's end. Thus Key's Q1'11 U.S. year/year incremental operating margin of 34% appears likely to be the standard for some time to come. Given the backdrop of increasing activity, among the biggest challenges, and opportunities, for Key this year will be keeping ahead of additional cost-inflation via future price increases. Our estimates presume Key will be successful." Morgan Keegan goes on to say, "We are raising our price target to $23 from $19. Our price target is based on 15.0x our upwardly revised 2012 EPS estimate of $1.55. We are maintaining our Outperform rating." Shares of KEG are up 12 cents this morning to $18.32, a gain of 0.66%.