Key Stats for Baker Hughes Stock
- Past week’s performance: +2.7%
- 52-week range: $33 to $59
- Valuation model target price: $72.16
- Implied upside: 22.5% over the next 2.9 years
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What Happened?
Baker Hughes (BKR) shares traded near $58.92 on Friday, and the stock has climbed solidly since late 2025 as investors reacted to strong year-end results and a steady backlog in both its Oilfield Services & Equipment and Industrial & Energy Technology segments.
The company reported Q4 2025 revenue of about $7.4 billion and full‑year revenue near $27.7 billion, and adjusted EBITDA grew while margins expanded, which helped reinforce confidence in its ability to translate the energy upcycle into higher profitability.
During the past week, Baker Hughes announced a multiyear agreement with Marathon Petroleum to become the preferred provider of downstream chemical technologies and digital monitoring across 12 U.S. refineries and 2 renewable fuel facilities, and the market viewed the deal as supportive for recurring service revenue because it extends an existing relationship in a critical customer base.
The company also declared a quarterly dividend of $0.23 per share, payable on February 27, 2026, and the stock rose about 2.7% on February 6, even as trading volume fell, suggesting income investors remain engaged while overall activity cooled after the ex‑dividend date in November.
With the share price already near its 52‑week high, news about portfolio pruning—such as the earlier $1.15 billion sale of the Precision Sensors & Instrumentation product line—plus ongoing margin gains, has supported the stock, but expectations now hinge on how effectively Baker Hughes converts its opportunity pipeline into profitable orders through 2026.
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Is Baker Hughes Stock Undervalued?
Under the valuation model assumptions realized through 12/31/28, the stock is modeled using:
- Revenue growth (CAGR): 1.8%
- Operating margins: 14.1%
- Exit P/E multiple: 22.8x
Based on these inputs, the model estimates a target price of $72.16, implying a 22.5% total return from the current share price of $58.92 and an annualized return of 7.2% over the next 2.9 years.
Execution in the OFSE segment will matter because offshore and international drilling activity, subsea orders, and chemicals demand must stay healthy for Baker Hughes to maintain pricing and utilization at today’s levels.
Performance in the IET segment is also important, since power‑generation equipment, LNG projects, and industrial energy systems carry higher margin potential, and recent commentary points to strong order momentum and expanding EBITDA margins in that business.
If these operational and capital‑allocation drivers hold, the current valuation suggests the market already prices in steady but not explosive growth, so near‑term share moves may track order trends, energy‑infrastructure spending, and any updates to the company’s long‑term financial framework.
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