KEG’s Domestic Business Shifting In Right Direction, International Business Could Rebound

Analysts at Wunderlich Securities reiterate their "buy" rating on Key Energy Services Inc KEG, while revising their estimates for the company. The target price for KEG is set to $16. According to Wunderlich Securities, “We believe Key Energy Services (KEG) is close to firing on all cylinders again as the domestic business mix is shifting in the right direction, Latin American work could begin to rebound, and large domestic customers seem to finally be placing longer-term orders.” “We believe large E&P customers finally have the conviction to increase workover and new well business, boosting Key’s activity… We anticipate this week’s activity report should see a small increase in utilization, but even a small rise puts the total closer to the critical 70% utilization level… We do not anticipate Key adding to its pressure pumping business given the large number of competitors in the segment, causing margins to continue to shrink,” the analysts mention. Wunderlich Securities has raised its EPS estimates for 2010 from $0.08 to $0.09, while it has lowered its EPS estimates for 2011 from $0.89 to $0.88. More Analyst Ratings here