Baker Hughes Company (BKR), based in Houston, Texas, is one of the world's largest oilfield service providers. Valued at $32.31 billion by market cap, it offers a broad portfolio of technologies and services across the global energy and industrial value chains. The company operates through two main segments: Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET). Serving a diverse range of clients, Baker Hughes supports various sectors from upstream to downstream, onshore to offshore, and businesses of all sizes.
Baker Hughes has underperformed the broader market over the past year. The stock has gained 12.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 28.9%. In 2024, BKR stock is down 5.3%, while the SPX is up 11.2% on a YTD basis.
Narrowing the focus, BKR’s underperformance looks less pronounced compared to the SPDR S&P Oil & Gas Equipment & Services ETF (XES). The exchange-traded fund has gained about 24.6% over the past year. The ETF’s 8.2% gains on a YTD basis compare to the stock’s loss over the same time frame.
On Apr. 23, Baker Hughes outperformed analysts' predictions for Q1 profit due to increased demand for its drilling services abroad and raised its dividend. The stock gained 1.7% on the day it released earnings, however declined 1% the following day.
For the current fiscal year, ending in December, analysts expect BKR’s EPS to grow 30% to $2.08 on a diluted basis. The company's earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 21 analysts covering BKR stock, the consensus rating is a “Strong Buy.” That’s based on 17 “Strong Buy” ratings, one “Moderate Buy,” and three “Holds.”
This configuration is slightly more bullish than three months ago, with 16 suggesting a “Strong Buy.”
On Apr. 29, Wells Fargo analyst Roger Read maintained a “Hold” rating on Baker Hughes with a price target of $35.00. However, on Apr. 25, Jefferies analyst Lloyd Byrne maintained their bullish stance on Baker Hughes, giving a “Buy” rating.
The mean price target of $40.95 represents a 26.5% premium to BKR’s current price levels. The Street-high price target of $46 suggests an ambitious upside potential of 42.1%.
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