UPDATE: Wunderlich Securities Reiterates Hold Rating, Lowers PT on Key Energy Services on Difficult Domestic Environment

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In a report published Wednesday, Wunderlich Securities analyst Jason A. Wangler reiterated a Hold rating on
Key Energy ServicesKEG
, but lowered the price target from $9.00 to $7.00. In the report, Wunderlich Securities noted, “Key Energy Services (KEG) pre-announced operating EPS in the range of -$0.14 to -$0.15, well below our previous -$0.02 estimate and the Street's $0.00 forecast due to lower-than-expected activity in California, muted activity increases in the rest of the U.S., and continued struggles internationally. The company expects revenues to be down 2% sequentially; a surprising statistic given the strength seen in the OFS market overall. This lower revenue figure also is joined by higher costs due to write-offs, redeployment, and severance costs in Russia and Mexico. Overall it's clear Key is struggling even as the domestic services market is showing overall improvement and, while it has been able to reduce debt nicely, we remain Hold rated given the company-specific headwinds facing KEG.” Key Energy Services closed on Tuesday at $6.86.
Posted In: Analyst ColorPrice TargetAnalyst RatingsJason A. WanglerWunderlich Securities
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