BKR
Baker Hughes Company$60.19
Sell
Target $42.37
Report: Mar 08, 2026Energy • Oil & Gas Equipment & Services • Cyclical OperatorSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$60.19-29.6%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$42.37
(30% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$70.41
52 Week Low$34.56
Avg. 3 Month Volume9.64M
Efficiency
LTM Gross Margin23.6%
LTM EBITDA Margin18.2%
LTM EBIT Margin13.7%
LTM Operating Margin13.8%
LTM ROA7.3%
LTM ROE16.8%
LTM ROIC17.4%
LTM ROCE13.3%
Capital Structure
Market Cap (MM)$67.8B
Enterprise Value (MM)$69.2B
Shares Outstanding992.07M
Total Debt (MM)$16.16B
Cash & Equivalents (MM)$14.76B
LTM Net Debt (MM)$1.40B
LTM Net Debt/EBITDA0.3x
Growth
TTM Rev. Growth0.2%
Last 3-Yr Rev. CAGR8.2%
Last 3-Yr EBITDA CAGR39.2%
Last 3-Yr EPS CAGRN/A
Valuation
Street Target Price$72.00
LTM EV/Revenue2.5x
LTM EV/Gross Profit10.5x
LTM EV/EBIT18.2x
LTM EV/EBITDA13.7x
LTM P/E21.8x
LTM EV/FCF27.8x
LTM P/FCF27.3x
LTM P/TB1.7x
LTM P/B3.5x
Dividend Yield1.3%
Payout Ratio29.1%
Executive SummarySituation: Current price is $60.19 versus fair value $42.37 (-29.6% expected return), and valuation confidence is stable. Debate: Bull case depends on Closing and Integration of Chart Industries Acquisition. Bear case centers on Cyclical 'Lower-for-Longer' Downturn in OFSE. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
The IET segment captures a $100B addressable market in power demand by 2030, driven by AI and data centers; the Chart acquisition delivers $325M in cost synergies; and the $32.4B backlog provides a recession-proof earnings floor.
Bear Case
OFSE cyclicality drags on total returns as rig counts soften; insiders are signaling overvaluation through $38.5M in net sales; and the negative incremental ROIC of -25.2% indicates that growth is being bought at value-destructive prices.
Key Catalysts
Mid-Term (6-18 months)Impact: Critical
Closing and Integration of Chart Industries Acquisition. This is the defining strategic move for BKR's 'Energy Technology' pivot. Success re...
Long-Term (18+ months)Impact: High
NovaLT Capacity Doubling. Doubling production capacity by H1 2027 to meet the $3B data center order outlook. This addresses the current capa...
Long-Term (18+ months)Impact: Moderate
Baker Hughes is at a critical juncture as it faces a hostile activist campaign while simultaneously attempting to integrate its largest acqu...
Primary Risks
Concern: High
Cyclical 'Lower-for-Longer' Downturn in OFSE. A prolonged period of low rig counts and reduced upstream spending would impair the cash flow...
Concern: Medium
Insider-Market Divergence. The risk that insiders are correct in their assessment of overvaluation, leading to a sharp re-rating as institut...
Concern: Medium
The stewardship verdict is complicated by the active hostile campaign from Ananym Capital. We outline the following Governance Outcome Tree:...
Recent Activity
2025-07-23SEC Filing (8-K)
+11.64%Baker Hughes announces Q2 2025 results with $6.9B revenue, $701M net income, and strategic portfolio transactions.
2025-04-23SEC Filing (SC 13G/A)
-6.44%JPMorgan Chase & Co. reports 9.3% beneficial ownership of Baker Hughes Class A Common Stock
2024-07-26SEC Filing (8-K)
+5.82%Baker Hughes announces second-quarter 2024 results with $7.1 billion revenue
2022-10-19SEC Filing (8-K)
+6.08%Baker Hughes announces Q3 2022 results with $5.4B revenue, $269M GAAP operating income, and organizational restructuring.
2022-08-04SEC Filing (8-K)
-6.02%Baker Hughes announces salary increase for Rod Christie effective September 18, 2022
Valuation Table
9.8/10Decision Grade
Scenario Range
$0
Bear
$44
Bull
$60