Jefferies Raises Price Target and Estimates on Key Energy Services (KEG), Solid Market Trends and Q1 Results

Jefferies is maintaining its Buy rating on shares of Key Energy Services (NYSE: KEG) and is raising its price target from $18 to $20 following solid Q1 results.

The firm reports that after several quarters of limited pricing power, the company was able to aggressively push pricing in all of its business segments in Q1 beyond cost inflation.

The company's coiled tubing business is expected to experience continued growth throughout the year and into 2012 following a 16% sequential revenue growth in Q1.

KEG reiterated its FY11 outlook of 40-50% revenue growth Y/Y with its 16 new rigs in Mexico, a growing number of rigs in Columbia, and further growth in areas like the Middle East and Russia driving its belief.

As a result, Jefferies is increasing its FY11 EPS estimate from $0.62 to $0.81 and its FY12 estimate from $1.27 to $1.52.

For more ratings news on Key Energy Services click here and for the rating history of Key Energy Services click here.

Shares of Key Energy Services closed at $16.27 yesterday.

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