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Thursday, December 30, 2010

Wells Fargo (NYSE:WFC) Raises Key Energy Services (NYSE:KEG) Valuation Range

Wells Fargo (NYSE:WFC) said they like the strategy being employed by Key Energy Services (NYSE:KEG) to transform the company, especially their initial focus on "heavy duty, workover rigs, and large-diameter, coiled tubing units."

Wells said, "We like KEG's transformation strategy and initial focus on heavy duty, workover rigs, and large-diameter, coiled tubing units. Legacy U.S. rigs should benefit from a 10%+ rise in flowing oil wells over the next 18 months. Finally, it's pushing into new foreign markets, like Colombia and MENA. But, it's pricing in credit for much of this and, before considering higher multiples, we'd prefer to see more results."

Wells Fargo maintains a "Market Perform" rating on Key Energy Services, which closed Wednesday at $13.17, gaining $0.25, or 1.93 percent.

They raised their valuation range on Key Energy from $10.75-$11.25 to $13-$13.75.

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