KEG - Hold Your Fire On Key Energy Services
KEG’s stock price has crashed
Key Energy Services (KEG) is an onshore, rig-based well-servicing contractor. KEG is critically dependent on the U.S. crude oil production growth. The current energy price weakness, upstream customers’ capex budget uncertainty, and delay in completion activities are likely to see KEG’s performance weak in the short-run. KEG’s cash flow is not strong. I do not expect KEG’s stock price to strengthen much in the short-run. However, in the medium-to-long run, its profitability can improve as the industry headwinds recede. In 2018, KEG’s stock price has decreased by 82%