UPDATE: Wunderlich Securities Downgrades Key Energy Services on Expectations of Weak US and International Markets
In a report published Tuesday, Wunderlich Securities analyst Jason A. Wangler downgraded the rating on Key Energy Services (NYSE: KEG) from Hold to Sell, but reiterated the $6.00 price target.
In the report, Wunderlich Securities noted, “On the heels of recent results from OFS companies and our bearish stance on certain sectors within the space, and with the run of Key Energy Services' (KEG) stock, we are downgrading our rating on KEG from Hold to Sell and maintaining a $6 price target. We believe the oversupplied domestic market for many of Key's business lines, further exacerbated by seasonality issues into 4Q13 and 1Q14, should harm pricing and utilization over the next six months while overall in 2014 we expect the E&Ps to remain content growing activity through increased efficiencies rather than adding to the rig count. Further, the international market remains difficult given the issues in Mexico and early-stage nature of other areas. These headwinds and premium valuation cause us to downgrade from Hold to Sell.”
Key Energy Services closed on Monday at $7.44.
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