Baker Hughes
BKR
$64.90
+0.12%
Baker Hughes Company is a leading energy technology company providing oilfield services, equipment, and industrial energy technology solutions to the global energy industry. As one of the 'Big Three' oilfield services players alongside SLB and Halliburton, it holds a strong competitive position, with a diversified portfolio spanning hydrocarbon development and emerging energy technologies like hydrogen storage. The current investor narrative centers on the company's strategic pivot toward energy transition technologies, recent divestitures to sharpen focus, and the potential impact of geopolitical tensions in the Middle East on energy markets, which could drive demand for its services. Additionally, the company's robust financial performance and positive analyst sentiment are drawing attention, as it balances traditional oilfield services with growth in industrial and energy technology segments.…
BKR
Baker Hughes
$64.90
Related headlines
Investment Opinion: Should I buy BKR Today?
Based on the analysis, BKR is rated a Buy. The thesis is supported by a diversified business model, a reasonable valuation (PE 17.4x vs. industry 22.5x), and a consensus analyst target of $71.52, implying 10.3% upside. The company's strategic focus on energy transition and recent divestitures could drive long-term growth.
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BKR 12-Month Price Forecast
The AI assessment is bullish with medium confidence. BKR's valuation is attractive relative to peers, and the analyst consensus supports upside. However, the modest revenue growth and geopolitical uncertainties warrant caution. If the company can accelerate growth through its energy transition initiatives, the stock could re-rate higher. Key factors to monitor include quarterly revenue growth, oil price trends, and progress in hydrogen projects. A downgrade to neutral would occur if revenue growth falls below 1% or if the stock breaks below $60.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Baker Hughes's 12-month outlook, with a consensus price target around $71.52 and implied upside of +10.2% versus the current price.
Average Target
$71.52
0 analysts
Implied Upside
+10.2%
vs. current price
Analyst Count
—
covering this stock
Price Range
$51 - $85
Analyst target range
Baker Hughes is covered by 23 analysts, with a consensus recommendation of 'Buy' and a mean recommendation score of 1.71 (where 1 is Strong Buy and 5 is Sell). The average price target is $71.52, implying an upside of approximately 10.3% from the current price of $64.82. The distribution of ratings is not provided, but the consensus leans bullish, with recent actions from firms like Citigroup and TD Cowen reiterating Buy ratings. The target price range spans from a low of $51.00 to a high of $85.00, indicating a wide spread of expectations. The high target of $85 suggests some analysts anticipate significant upside, possibly driven by a prolonged closure of the Strait of Hormuz boosting oilfield services demand, while the low target of $51 reflects concerns about a potential downturn in energy prices or execution risks in the energy transition strategy. The recent downgrade by Barclays from Overweight to Equal Weight in May 2026 adds a note of caution, but overall sentiment remains positive.
Bulls vs Bears: BKR Investment Factors
Baker Hughes presents a balanced investment case with strong momentum, a diversified portfolio, and a reasonable valuation relative to peers. However, modest revenue growth and geopolitical uncertainties temper the bullish outlook. The bull case is currently stronger, supported by analyst consensus and strategic initiatives, but the key tension lies in whether the company can accelerate growth beyond the low-single-digit range to justify its forward PE. If revenue growth reaccelerates or energy transition ventures gain traction, the stock could re-rate higher; otherwise, it may face valuation compression.
Bullish
- Strong Momentum with 49.9% 1Y Gain: BKR has surged 49.87% over the past year, outperforming the S&P 500's 20.37% gain by a wide margin. The stock is trading near its 52-week high of $70.41, reflecting strong investor confidence and positive momentum.
- Attractive Valuation vs. Industry: With a trailing PE of 17.38x versus the industry average of 22.5x, BKR trades at a 22.8% discount. This suggests the market is pricing in lower growth, but the forward PE of 20.48x implies expected EPS growth of ~17.8%, offering a reasonable risk-reward.
- Balanced Portfolio Diversifies Risk: Revenue is split nearly evenly between Oilfield Services & Equipment ($3.237B) and Industrial & Energy Technology ($3.35B) in Q1 2026. This diversification reduces reliance on cyclical oilfield spending and provides exposure to energy transition growth areas like hydrogen.
- Analyst Consensus is a Buy: 23 analysts rate BKR a 'Buy' with a mean score of 1.71 (1=Strong Buy). The average price target of $71.52 implies 10.3% upside from the current price of $64.82, with a high target of $85 suggesting significant potential.
Bearish
- Modest Revenue Growth of 2.5%: Q1 2026 revenue grew only 2.49% YoY to $6.587B, a deceleration from prior quarters. This suggests a mature market with limited top-line expansion, which may not justify a premium valuation.
- Potential Overextension Near Highs: Trading at 92% of its 52-week range, the stock may be overbought after a strong run. The 3-month relative strength is -3.94%, indicating underperformance versus the S&P 500 recently, which could signal a pullback risk.
- Geopolitical Risk from Hormuz Closure: A prolonged Strait of Hormuz closure could disrupt energy markets, but it also introduces uncertainty. While it may boost oilfield services demand, it could also lead to higher costs and operational disruptions, as noted by the CFO.
- Negative PEG Ratio Indicates Overvaluation: The PEG ratio is -1.37, which is negative due to expected earnings decline or low growth. This suggests the stock may be overvalued relative to its growth prospects, despite the PE discount.
BKR Technical Analysis
Baker Hughes is in a strong uptrend, with the stock price at $64.82 as of August 14, 2026, reflecting a 49.87% gain over the past year. The current price is near the upper end of its 52-week range, sitting at approximately 92% of the range (calculated as (64.82 - 42.3) / (70.41 - 42.3) = 0.92). This positioning near the highs suggests strong momentum, though it also raises the risk of overextension, especially after a significant run-up. The stock's beta of 0.959 indicates it is slightly less volatile than the broader market, providing some stability in a volatile energy sector.
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
+51.6%
Cumulative gain past year
| Period | BKR Return | S&P 500 |
|---|---|---|
| 1m | +16.0% | +4.0% |
| 3m | -0.9% | +5.3% |
| 6m | +5.5% | +12.6% |
| 1y | +51.6% | +20.1% |
| ytd | +37.7% | +13.3% |
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BKR Fundamental Analysis
Baker Hughes reported revenue of $6.587 billion for Q1 2026, up 2.49% year-over-year, indicating modest growth. The company's revenue has been relatively stable over the past year, with quarterly figures ranging from $6.427 billion to $7.386 billion, showing a slight deceleration in the most recent quarter. The Oilfield Services & Equipment segment generated $3.237 billion in revenue, while the Industrial & Energy Technology segment contributed $3.35 billion, highlighting a balanced portfolio. This diversification helps mitigate cyclicality in oilfield spending, but the overall growth rate is modest, suggesting a mature market.
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?
Given that Baker Hughes has positive net income, the PE ratio is the primary valuation metric. The trailing PE is 17.38x, while the forward PE is 20.48x, indicating that the market expects earnings to grow in the coming year. The gap between trailing and forward PE suggests a modest growth expectation of about 17.8% in earnings per share. Compared to the industry average PE of 22.5x (from valuation data), Baker Hughes trades at a discount of approximately 22.8%, which could be justified by its lower growth rate relative to some peers. Historically, the stock's PE has ranged from 8.6x to 41x over the past few years, with the current 17.38x sitting near the lower end of that range, suggesting the stock is not overvalued relative to its own history.
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 risks include a moderate debt-to-equity ratio of 0.38, which is manageable but could increase if the company makes large acquisitions. The current ratio of 1.36 indicates adequate liquidity, but free cash flow of $2.29B TTM is modest relative to market cap. Revenue concentration in energy markets exposes BKR to oil price volatility, and the recent 2.5% growth rate suggests limited pricing power. Additionally, the payout ratio of 35% and dividend yield of 2.02% provide some income but limit reinvestment capacity.
FAQ
Key risks include: 1) Financial: moderate debt-to-equity of 0.38 and modest free cash flow of $2.29B, which could limit flexibility. 2) Market: competitive pressures from SLB and Halliburton, and potential valuation compression if the PE reverts to historical averages. 3) Macro: sensitivity to oil prices and geopolitical events like the Strait of Hormuz closure. 4) Company-specific: execution risks in energy transition projects and the recent Barclays downgrade. The most severe risk is a sharp oil price decline, which could push the stock down 35% to its 52-week low.
The 12-month forecast is moderately bullish. The base case (50% probability) targets $68-$75, aligning with the analyst average of $71.52. The bull case (30% probability) targets $75-$85, driven by strong energy demand and successful transition initiatives. The bear case (20% probability) targets $51-$60, if oil prices collapse or growth stalls. The most likely scenario is the base case, assuming stable oil prices and continued modest growth.
BKR appears undervalued relative to its industry, with a trailing PE of 17.38x versus the industry average of 22.5x, a 22.8% discount. Historically, its PE has ranged from 8.6x to 41x, and the current level is near the lower end, indicating it is not overvalued. The forward PE of 20.48x implies expected earnings growth of ~17.8%, which is reasonable. The market is pricing in moderate growth, but if the company can exceed expectations, there is room for multiple expansion.
BKR is a good buy for investors with a moderate risk tolerance and a long-term horizon. The stock offers a 10.3% upside to the average analyst target of $71.52, and its PE of 17.38x is below the industry average of 22.5x, suggesting it is not overvalued. However, the modest revenue growth of 2.5% and geopolitical risks could limit near-term gains. It is particularly suitable for those who believe in the energy transition story and want exposure to both traditional and new energy technologies.
BKR is better suited for long-term investment, given its moderate growth and strategic positioning in energy transition. The stock's beta of 0.96 indicates lower volatility than the market, making it less attractive for short-term trading. With a dividend yield of 2.02% and a payout ratio of 35%, it offers some income. A minimum holding period of 3-5 years is recommended to allow the energy transition strategy to materialize and to ride out oil price cycles.