Baker Hughes
BKR
$53.62
-4.25%
Baker Hughes is a global energy technology and oilfield services company operating through two segments: Oilfield Services & Equipment (OFS), one of the 'Big Three' oilfield-services franchises alongside SLB and Halliburton, and Industrial & Energy Technology (IET), which manufactures turbines, compressors, pumps, valves, and related testing and monitoring systems for energy and industrial applications. Its competitive identity is that of a diversified industrial-energy hybrid rather than a pure-play services name — roughly half of revenue comes from the less cyclical IET segment, giving it exposure to LNG, gas infrastructure, and power generation that pure oilfield peers lack, while its OFS business derives about three-quarters of sales from international markets. The current investor narrative centers on portfolio simplification and capital returns: management agreed to divest the non-core Waygate Technologies unit for $1.45 billion to sharpen focus on core operations, signed a memorandum of understanding with Vallourec on underground hydrogen storage, and has built a large cash position that supports a 2.0% dividend yield. Offsetting this is a demand debate — revenue declined 2.4% year over year in the latest quarter, and management has flagged that a prolonged Strait of Hormuz closure could persist into the second half of 2026, embedding a risk premium in energy markets while clouding the international activity outlook that drives the OFS segment.…
BKR
Baker Hughes
$53.62
Related headlines
People also watch
SLB
SLB
Halliburton
HAL
National Oilwell Varco
NOV
Archrock Inc
AROC
Kodiak Gas Services, Inc.
KGS
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 $70.63 and implied upside of +31.7% versus the current price.
Average Target
$70.63
0 analysts
Implied Upside
+31.7%
vs. current price
Analyst Count
—
covering this stock
Price Range
$51 - $85
Analyst target range
Drowning in data?
Find the real signal!
Bulls vs Bears: BKR Investment Factors
The bear case currently has slightly stronger near-term evidence: revenue is declining 2.4% year over year, relative strength is -14.3% over six months, and the stock has given back 20.9% from its 52-week high. The bull case rests on valuation (17.4x trailing, 11.3x EV/EBITDA), $3.13 billion of TTM free cash flow, a fortress balance sheet (0.38 debt-to-equity), and a unanimous buy consensus with a $71.17 average target implying 27.8% upside. The single most important tension is whether the international OFS demand outlook — clouded by the Strait of Hormuz closure risk extending into H2 2026 — stabilizes, because that segment drives the cyclical earnings that the forward $5.01 EPS estimate depends on. If international activity holds and the IET backlog converts, the stock is cheap; if the geopolitical disruption spreads, the forward estimate is at risk and the current discount is deserved.
Bullish
- Analyst consensus sees 27.8% upside: All 24 covering analysts rate BKR a buy (mean recommendation 1.68) with an average target of $71.17 versus the current $55.70, implying roughly 27.8% upside. Even the lowest target of $51.00 sits only about 8.4% below the current price, suggesting the downside seen by the most cautious analyst is limited relative to the consensus upside.
- Valuation is modest for a hybrid industrial: BKR trades at 17.4x trailing and 18.9x forward earnings, 1.62x sales, and 11.3x EV/EBITDA, with a 2.39x price-to-book. For a company with roughly half of revenue from the less cyclical IET segment (turbines, compressors, LNG and gas infrastructure), these multiples are undemanding and leave room for re-rating if the demand debate resolves favorably.
- Strong free cash flow and balance sheet: TTM free cash flow is $3.128 billion against a $44.99 billion market cap, and debt-to-equity is only 0.379 with a current ratio of 1.357. The $1.45 billion Waygate divestiture adds to an already large cash position, funding the 2.0% dividend (payout ratio 35.2%) and further capital returns without balance-sheet strain.
- Profitability improved year over year: Q2 2026 net income of $682 million and diluted EPS of $0.69 compared with $701 million and $0.71 in Q2 2025, but net margin rose to 10.1% from 10.1% on a lower revenue base, and Q1 2026 EPS of $0.93 versus $0.40 a year earlier shows meaningful earnings expansion. ROE of 13.7% and ROA of 4.85% confirm the business still generates solid returns on capital.
Bearish
- Revenue is shrinking, not growing: Q2 2026 revenue of $6.742 billion declined 2.4% year over year from $6.910 billion, and the trailing P/E of 17.4x rests on a near-zero trailing EPS of $0.058, meaning the valuation depends entirely on forward estimates of $5.01. A company with negative top-line momentum rarely sustains multiple expansion.
- Strait of Hormuz risk clouds international OFS: Management has flagged that a prolonged Strait of Hormuz closure could persist into the second half of 2026, and gas prices have already surged 61% to $4.43 per gallon since December on that uncertainty. Because roughly three-quarters of OFS sales come from outside North America, this geopolitical risk premium directly threatens BKR's largest cyclical profit pool.
- Momentum and relative strength have deteriorated: The stock is down 6.8% over six months and 0.45% over three months while the S&P 500 rose 7.48% and 2.69% respectively, producing relative strength of -14.3% and -3.1%. It has fallen from a 52-week high of $70.41 to $55.70, a 20.9% drawdown, and sits just 1.1% below its level one month ago.
- Earnings quality is uneven and volatile: Quarterly diluted EPS has swung from $1.18 (Q4 2024) to $0.40 (Q1 2025) to $0.93 (Q1 2026) to $0.69 (Q2 2026), and the trailing P/E of 17.4x against a $0.058 trailing EPS implies a PEG ratio of -1.37, a meaningless figure that signals earnings are not on a clean growth path. Tax benefits (a -$210 million tax expense in Q2 2026) flattered net income.
BKR Technical Analysis
Beta
1.03
1.03x market volatility
Max Drawdown
-24.2%
Largest decline past year
52-Week Range
$44-$70
Price range past year
Annual Return
+13.4%
Cumulative gain past year
| Period | BKR Return | S&P 500 |
|---|---|---|
| 1m | -6.4% | -1.2% |
| 3m | -6.3% | +3.4% |
| 6m | -22.2% | +7.0% |
| 1y | +13.4% | +14.4% |
| ytd | +13.7% | +12.0% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
BKR Fundamental Analysis
Quarterly Revenue
$6.7B
2026-06
Revenue YoY Growth
-2.4%
YoY Comparison
Gross Margin
23.4%
Latest Quarter
Free Cash Flow
$3.1B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is BKR Overvalued?
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 and operational risks center on revenue contraction and earnings quality. Q2 2026 revenue fell 2.4% year over year to $6.742 billion, and the trailing P/E of 17.4x is calculated on a trailing EPS of just $0.058, meaning the entire valuation rests on forward EPS of $5.01 — a miss of even 10% would push the forward multiple to roughly 21x. Margins are thin (23.6% gross, 12.8% operating, 9.3% net), so a modest revenue decline flows disproportionately to the bottom line, and Q2 2026 net income of $682 million was helped by a -$210 million tax benefit rather than pure operations. The balance sheet itself is a strength, with debt-to-equity of 0.379 and a current ratio of 1.357, so solvency is not the concern — earnings durability is.
Market and competitive risks are dominated by the geopolitical energy cycle and relative underperformance. BKR's beta of 1.035 means it moves roughly in line with the market, but its six-month relative strength of -14.3% versus the S&P 500's +7.48% shows it is being left behind in the current rotation. The Strait of Hormuz closure risk flagged by management for H2 2026, combined with a 61% surge in gas prices to $4.43 per gallon, embeds a risk premium that could suppress international OFS activity — the source of roughly three-quarters of segment sales. Competition from SLB and Halliburton in OFS and from industrial majors in IET limits pricing power, and at 1.62x sales and 11.3x EV/EBITDA the stock is not so cheap that it is immune to multiple compression if the cycle turns.
In a worst-case scenario, a prolonged Hormuz closure into H2 2026 would cut international OFS volumes, force analysts to trim the $5.01 forward EPS estimate, and trigger a de-rating toward the $51.00 low analyst target — about 8.4% below the current $55.70. A deeper energy-cycle downturn could take the stock toward its 52-week low of $44.26, a decline of roughly 20.5% from current levels, and the historical max drawdown of -24.24% suggests a loss of that magnitude is within the realm of recent experience. From $55.70, an investor could realistically lose 20-25% in an adverse scenario, with the $44.26 low as the anchor for the downside.