Stock of the Day

May 1, 2024

Baker Hughes (BKR)

$37.80
+$0.65 (+1.7%)
Market Cap: $37.47B

About Baker Hughes

Baker Hughes Company provides a portfolio of technologies and services to energy and industrial value chain worldwide. The company operates through Oilfield Services & Equipment (OFSE) and Industrial & Energy Technology (IET) segments. The OFSE segment designs and manufactures products and provides related services, including exploration, appraisal, development, production, rejuvenation, and decommissioning for onshore and offshore oilfield operations. This segment also provides drilling services, drill bits, and drilling and completions fluids; completions, intervention, measurements, pressure pumping, and wireline services; artificial lift systems, and oilfield and industrial chemicals; subsea projects and services, flexible pipe systems, and surface pressure control systems; and integrated well services and solutions. It serves oil and natural gas companies; the United States and international independent oil and natural gas companies; national or state-owned oil companies; engineering, procurement, and construction contractors; geothermal companies; and other oilfield service companies. The IET segment provides gas technology equipment, including drivers, driven equipment, flow control, and turnkey solutions for the mechanical-drive, compression, and power-generation applications; and energy sectors, such as oil and gas, LNG operations, petrochemical, and carbon solutions. This segment also provides rack-based vibration monitoring equipment and sensors; integrated asset performance management products; inspection services; pumps, valves, and gears; precision sensors and instrumentation, and condition monitoring solutions. It serves upstream, midstream, downstream, onshore, offshore, and small and large scale customers. The company was formerly known as Baker Hughes, a GE company and changed its name to Baker Hughes Company in October 2019. Baker Hughes Company was incorporated in 2016 and is based in Houston, Texas.

Baker Hughes Bull Case

Here are some ways that investors could benefit from investing in Baker Hughes:

  • The stock has shown resilience with a current price around $36.82, indicating potential for growth as market conditions improve.
  • Institutional investors hold a significant 92.06% of Baker Hughes' stock, suggesting strong confidence in the company's future performance.
  • Recent earnings reports indicate that Baker Hughes exceeded analysts' expectations, with a reported EPS of $0.51, which is a positive sign for profitability.
  • Analysts have a consensus rating of "Moderate Buy" with a price target of approximately $49.11, indicating potential upside for investors.
  • The company has a manageable debt-to-equity ratio of 0.35, which suggests financial stability and lower risk compared to companies with higher leverage.

Baker Hughes Bear Case

Investors should be bearish about investing in Baker Hughes for these reasons:

  • The stock has experienced volatility, with a 12-month high of $49.40 and a low of $30.93, indicating potential risks associated with price fluctuations.
  • Recent target price reductions by analysts, such as from $54.00 to $48.00, may reflect concerns about future growth prospects.
  • Despite a strong institutional presence, the company faces competition in a challenging market, which could impact its market share and profitability.
  • The company's revenue for the latest quarter fell short of analyst estimates, which may raise concerns about its growth trajectory.
  • With a P/E ratio of 12.47, the stock may be considered overvalued compared to industry peers, which could deter some investors.
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