Baker Hughes Company (BKR), headquartered in Houston, Texas, is a leading provider of oilfield products, services, and digital solutions. Valued at a market cap of $42.6 billion, BKR ranks among the world’s largest oilfield service providers, offering services such as drilling, well intervention, decommissioning, surface pressure control, onshore composite pipe solutions, reservoir technology, and integrated well services.
Shares of this leading energy technology company have underperformed the broader market considerably over the past year. BKR has soared 24.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 32.3%. In 2024, shares of BKR stock are up 26.3%, while the SPX is up 24.7% on a YTD basis.
Narrowing the focus, BKR has surpassed the Energy Select Sector SPDR Fund’s (XLE) 11.9% return over the past year and a 13.2% rise in 2024.
On Oct. 22, BKR announced its Q3 earnings results, and its stock rose by 2.8% in the following trading session. While it surpassed the market’s earnings estimates, it fell short of the revenue expectations.
For the current fiscal year, ending in December, analysts expect BKR to report an EPS growth of 43.1% to $2.29 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 19 “Strong Buy” ratings, one “Moderate Buy,” and one “Holds.”
This configuration is more bullish than a month ago when 18 analysts gave the stock a “Strong Buy.”
On Nov. 14, Citigroup Inc. (C) analyst Scott Gruber raised Baker Hughes' price target from $42 to $50, maintaining a “Buy” rating. The firm sees a slight upside to 2025 EBITDA estimates for Baker Hughes and TechnipFMC due to improved pricing and internal efficiency initiatives. However, the outlook for SLB is uncertain due to ongoing deals, and Weatherford faces more risk due to its exposure to Mexico and Saudi oil developments.
The mean price target of $44.40 represents a 2.8% premium to BKR’s current price levels. The Street-high price target of $53 suggests an upside potential of 22.7%.
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