Wells Fargo Upgrades Key Energy Services (KEG) to Outperform; New Well Niches Should Remain Tight, As Its Working Legacy Well Service Fleet Expands

Wells Fargo upgraded Key Energy Services (NYSE: KEG) from Market Perform to Outperform, price target range $19-$20 from $15-16.

Wells analyst says, "We believe KEG has reached a sweet spot: stock is at an attractive entry level while the company appears set to enjoy solid dynamics across all three of its markets: US well servicing/fluids management; international well servicing, and completion services, into 2013. After channel checks, we raise (1) 2012E EPS/EBITDA from $1.55/$605MM to $1.72/$644MM on greater coiled tubing pricing power and target 2012 EBITDA multiples from 4.8-5.0x to 5.5-5.8x, given increased confidence in KEG's ability to capitalize on the secular uptrend in flowing oil wells."

For an analyst ratings summary and ratings history on Key Energy Services click here. For more ratings news on Key Energy Services click here.

Shares of Key Energy Services closed at $14.60 yesterday.

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