Baker Hughes
BKR
$56.09
-0.90%
Baker Hughes is a global energy technology company operating in two segments: oilfield services and equipment (OFSE) and industrial and energy technology (IET). As one of the Big Three oilfield services players alongside SLB and Halliburton, it holds a strong competitive position serving national oil companies, majors, and independents, with roughly three-fourths of OFSE revenue coming from outside North America. The current investor narrative centers on the company's strategic pivot toward energy transition technologies, including hydrogen storage and LNG, while navigating geopolitical risks such as the Strait of Hormuz closure that have boosted oil prices and upstream activity. Recent divestitures of non-core assets like Waygate Technologies for $1.45 billion underscore management's focus on streamlining operations and sharpening its core portfolio.…
BKR
Baker Hughes
$56.09
Related headlines
BKR 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Baker Hughes's 12-month outlook, with a consensus price target around $70.32 and implied upside of +25.4% versus the current price.
Average Target
$70.32
0 analysts
Implied Upside
+25.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$48 - $85
Analyst target range
Baker Hughes is covered by 22 analysts, with a consensus recommendation of 'Buy' and a mean recommendation score of 1.74 (where 1 is Strong Buy and 5 is Sell). The average price target is $70.32, implying 25.7% upside from the current price of $55.95. The distribution shows 16 Buy ratings, 5 Hold, and 1 Sell, reflecting a strongly bullish consensus. The average target has been stable, with recent upgrades from Citigroup and Susquehanna reaffirming positive views. The target range spans from a low of $48.00 to a high of $85.00, representing a 77% spread between the lowest and highest estimates. The high target of $85.00 implies 52% upside and likely assumes a recovery in oilfield services activity, successful execution in LNG and hydrogen, and multiple expansion. The low target of $48.00 suggests a 14% downside, pricing in a potential recession, margin compression, or geopolitical disruptions. The wide spread indicates elevated uncertainty, but the consensus leans decisively bullish, supported by recent institutional ratings where 7 of the last 10 actions were positive (Overweight/Buy).
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Bulls vs Bears: BKR Investment Factors
Baker Hughes presents a mixed picture: strong profitability, a healthy balance sheet, and a discounted valuation relative to peers support a bullish case, while decelerating revenue growth, negative price momentum, and geopolitical risks temper enthusiasm. The bull case currently has slightly stronger evidence given the 25.7% upside to the average analyst target and robust free cash flow generation. The single most important tension is whether the company can re-accelerate revenue growth through its energy transition pivot and international expansion, or if the deceleration trend continues, compressing the valuation multiple. Resolution of this tension will determine whether the stock moves toward the analyst high target of $85 or the low target of $48.
Bullish
- Strong Profitability and Margin Expansion: Net income surged 131% YoY to $930 million in Q1 2026, with net margin expanding to 14.12% from 6.25% a year ago. Operating margin improved to 12.28% from 11.70%, demonstrating operational leverage and cost control.
- Healthy Balance Sheet and Cash Position: Debt-to-equity ratio is a conservative 0.38, and the company holds $14.76 billion in cash and short-term investments. Current ratio of 1.36 indicates ample liquidity to weather downturns and fund growth initiatives.
- Attractive Valuation vs. Peers: Trailing P/E of 17.38x is a 21% discount to the industry average of 22.0x, suggesting the stock is undervalued relative to its oilfield services peers. The consensus analyst target of $70.32 implies 25.7% upside from the current price of $55.95.
- Strategic Pivot to Energy Transition: Baker Hughes is positioning for growth in LNG, hydrogen storage (MoU with Vallourec), and other energy transition technologies. The $1.45 billion divestiture of Waygate Technologies sharpens focus on core oilfield and industrial energy segments.
Bearish
- Decelerating Revenue Growth: Q1 2026 revenue grew only 2.49% YoY, a sharp deceleration from 7.4% in Q4 2025 and 10.5% in Q3 2025. This trend suggests the post-pandemic recovery cycle is maturing, and growth may continue to slow.
- Recent Price Decline and Negative Momentum: The stock has fallen 19.7% from its 52-week high of $70.41 and is down 6.86% in the past month, underperforming the S&P 500 by 7.17% on a relative basis. Short-term momentum is negative, signaling potential further downside.
- Geopolitical and Macro Risks: A prolonged closure of the Strait of Hormuz, as noted by Baker Hughes' CFO, could disrupt operations and create uncertainty. With a beta of 0.96, the stock is highly correlated to the market, offering no downside protection in a downturn.
- Elevated Valuation on Historical Basis: The trailing P/E of 17.38x is near the upper end of its historical range (8.6x to 19.6x), suggesting limited upside from multiple expansion. The forward P/E of 19.67x implies the market expects earnings contraction, which could weigh on sentiment.
BKR Technical Analysis
Baker Hughes is in a recovery uptrend over the past year, with the stock up 42.8% over the trailing 12 months, significantly outperforming the S&P 500's 18.35% gain. The current price of $55.95 sits at 48.3% of its 52-week range ($38.97 low to $70.41 high), indicating the stock has pulled back from the highs but remains well above the lows. This positioning suggests the stock is in a corrective phase within a broader uptrend, offering a potential entry point if the pullback stabilizes. Short-term momentum has turned negative, with the stock declining 6.86% over the past month and 6.41% over the past three months, diverging sharply from the strong one-year performance. This divergence could signal a temporary pullback or mean reversion, especially as the 1-month relative strength versus SPY is -7.17%, indicating significant underperformance. The recent slide from the April high of $69.67 to $55.95 represents a 19.7% decline, suggesting profit-taking or sector rotation. The 52-week low of $38.97 provides a key support level, while the 52-week high of $70.41 is the primary resistance. A breakout above $70.41 would signal a resumption of the uptrend, while a breakdown below $38.97 would negate the long-term bullish structure. With a beta of 0.96, the stock's volatility is roughly in line with the market, meaning it offers no additional cushion or risk relative to the S&P 500 for position sizing.
Beta
0.96
0.96x market volatility
Max Drawdown
-24.2%
Largest decline past year
52-Week Range
$42-$70
Price range past year
Annual Return
+25.5%
Cumulative gain past year
| Period | BKR Return | S&P 500 |
|---|---|---|
| 1m | -4.4% | +0.6% |
| 3m | -18.6% | +3.4% |
| 6m | +4.0% | +7.1% |
| 1y | +25.5% | +16.4% |
| ytd | +19.0% | +8.3% |
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BKR Fundamental Analysis
Baker Hughes reported Q1 2026 revenue of $6.587 billion, up 2.49% year-over-year, marking a deceleration from the 7.4% growth seen in Q4 2025 and the 10.5% growth in Q3 2025. The revenue trajectory is slowing, with the OFSE segment generating $3.237 billion and IET contributing $3.350 billion, showing a balanced mix. The deceleration reflects a normalization after a strong post-pandemic recovery cycle, but the company's exposure to international markets and LNG infrastructure provides a buffer against North American volatility. Net income for Q1 2026 was $930 million, up from $402 million in Q1 2025, representing a 131% surge, driven by margin expansion and a lower tax rate. Gross margin improved to 22.83% from 22.95% in the prior year quarter, while operating margin rose to 12.28% from 11.70%, indicating operational leverage. The net margin of 14.12% is well above the 6.25% reported in Q1 2025, reflecting strong cost control and a favorable product mix. The company is solidly profitable with a trailing twelve-month net income of $3.116 billion. Baker Hughes maintains a healthy balance sheet with a debt-to-equity ratio of 0.38 and a current ratio of 1.36, indicating ample liquidity. Free cash flow for Q1 2026 was $164 million, down from $409 million in Q1 2025, but trailing twelve-month FCF stands at $2.292 billion, representing a FCF yield of 5.1% based on the current market cap. ROE is a robust 13.74%, reflecting efficient capital use, while the company's $14.76 billion in cash and short-term investments provides a strong buffer for investments and dividends.
Quarterly Revenue
$6.6B
2026-03
Revenue YoY Growth
+2.5%
YoY Comparison
Gross Margin
22.8%
Latest Quarter
Free Cash Flow
$2.3B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is BKR Overvalued?
Since net income is positive, we lead with the P/E ratio. The trailing P/E is 17.38x, while the forward P/E is 19.67x, implying the market expects earnings to contract slightly over the next year. The forward P/E premium of 13% suggests modest growth expectations are already priced in. Compared to the industry average P/E of 22.0x (estimated for Oil & Gas Equipment & Services), Baker Hughes trades at a 21% discount, which may reflect its slower growth profile relative to peers like SLB and Halliburton. The discount appears justified given the decelerating revenue growth and the company's heavy exposure to international markets, which carry higher geopolitical risk. Historically, Baker Hughes' trailing P/E has ranged from 8.6x (Q4 2024) to 19.6x (Q3 2025), with the current 17.4x near the upper end of that band. This suggests the stock is not cheap on a historical basis, but the elevated multiple is supported by improved profitability and a stronger balance sheet. The P/B ratio of 2.39x is also near the middle of its historical range (1.33x to 3.13x), indicating fair value relative to book.
PE
17.4x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 9x~27x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
11.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Baker Hughes faces risks from decelerating revenue growth, which fell to 2.49% YoY in Q1 2026 from 10.5% in Q3 2025, indicating a maturing cycle. While net income surged 131%, this was partly due to a lower tax rate, and free cash flow declined to $164 million in Q1 2026 from $409 million a year ago, raising concerns about cash generation sustainability. The debt-to-equity ratio of 0.38 is manageable, but the company's heavy exposure to international markets (75% of OFSE revenue) introduces currency and geopolitical risks. Additionally, the forward P/E of 19.67x implies expected earnings contraction, which could pressure the stock if growth disappoints.
Market & Competitive Risks: The stock trades at a trailing P/E of 17.38x, near the upper end of its historical range, limiting multiple expansion potential. With a beta of 0.96, it offers no cushion against market downturns. Competitive pressures from SLB and Halliburton could erode market share, especially if Baker Hughes' energy transition pivot fails to gain traction. Recent news of a prolonged Strait of Hormuz closure could disrupt oil supply chains, benefiting oil prices but also creating operational uncertainty. The wide analyst target spread ($48-$85) reflects high uncertainty, and a sector rotation away from energy could exacerbate downside.
Worst-Case Scenario: In a severe recession or sharp oil price decline, Baker Hughes could see revenue contract, margins compress, and the stock fall to its 52-week low of $38.97, representing a 30.4% decline from the current price of $55.95. This scenario could be triggered by a global economic slowdown, a resolution of geopolitical tensions that removes the risk premium from oil prices, or a failure to execute on energy transition projects. The analyst low target of $48.00 implies a 14.2% downside, but the worst-case could be deeper if earnings miss expectations significantly.
