Key Stats for Baker Hughes Stock
- Past-30-Day Performance: 21%
- 52-Week Range: $34 to $63
- Valuation Model Target Price: $68
- Implied Upside: 9%
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What Happened?
Baker Hughes Company stock rose about 21% in the last 30 days, finishing near $62 per share as investors responded to record earnings, expanding backlog, and improved 2026 visibility. Shares now trade close to their 52-week high of $63, reflecting sustained buying pressure rather than a short-term spike.
The rally was driven by record 2025 financial performance and stronger-than-expected order momentum, which improved confidence in the company’s growth durability.
Baker Hughes reported full-year adjusted EBITDA of $4.83 billion and fourth-quarter adjusted EBITDA of $1.34 billion, both record levels.
Industrial & Energy Technology generated $14.9 billion of orders in 2025, including $4 billion in Q4, lifting backlog to a record $32.4 billion with book-to-bill above 1x.
Power systems orders reached $2.5 billion, including $1 billion tied to data centers, strengthening exposure to AI-driven electricity demand.
Management guided to 2026 revenue of $27.25 billion and adjusted EBITDA of $4.85 billion, implying mid-single-digit organic EBITDA growth.
CEO Lorenzo Simonelli said the company is seeing a “global power demand multiyear growth cycle,” supported by LNG, gas infrastructure, and electrification trends.
IET margins are expected to reach 20% in 2026, supported by higher-margin backlog conversion and continued strength in gas technology and LNG, where $2.3 billion of equipment orders were booked in 2025.
Institutional activity reinforced the move. Vanguard increased its stake to 123,890,075 shares, representing about 12.56% of the company.
NEOS Investment Management boosted its position by 71.9%, HighTower Advisors raised its stake by 14.0%, and Norges Bank opened a new $862.7 million position. Institutional ownership remains near 92%, underscoring continued long-term conviction.
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Is Baker Hughes Undervalued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): 1.8%
- Operating Margins: 14.1%
- Exit P/E Multiple: 21x
Revenue growth reflects a shift toward more stable, long-cycle infrastructure markets rather than short-cycle drilling exposure.
From 2025 revenue of $27.73 billion to 2028 estimated revenue of $29.27 billion, the implied CAGR supports the conservative 1.8% assumption used in the model.
Expansion continues to be driven by Industrial & Energy Technology, where record backlog of $32.4 billion provides multi-year revenue visibility.
Power systems remains a structural driver, with $2.5 billion of 2025 orders including $1 billion tied to data centers, positioning the company for accelerating AI infrastructure investment and distributed gas power deployment.
Margin expansion toward 14.1% assumes continued productivity gains and favorable backlog conversion.
Management expects IET margins to reach 20% in 2026, supported by higher-margin equipment mix and services pull-through. Free cash flow of $2.7 billion in 2025 and a 57% conversion rate strengthen balance sheet flexibility.
Based on these inputs, the model estimates a target price of $68, implying about 9% total upside. However, when annualized through the model horizon, that equates to approximately 2.9% per year, suggesting limited forward return potential from current levels.
At current prices near $62, Baker Hughes appears fully valued to slightly overvalued, with much of the recent 21% rally likely reflecting improving fundamentals and margin expansion expectations.
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