Key Stats for Baker Hughes Stock
- Current Price: $68.94
- Target Price (Mid): ~$92
- Street Target: ~$63
- Potential Total Return: ~33%
- Annualized IRR: ~6% / year
- Earnings Reaction: +6.90% (April 24, 2026)
- Max Drawdown: -16.86% (March 13, 2026)
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What Happened?
Baker Hughes (BKR) entered 2026 as one of the strongest performers in the energy sector, and last week’s Q1 results made the case for why. Shares jumped 6.90% on April 24 after the company beat Wall Street on every major metric, setting a new 52-week high.
Bulls argue that the Industrial & Energy Technology segment, known as IET, which produces turbines, compressors, and power systems, deserves a valuation premium closer to an industrial technology business than a traditional oilfield services provider. Bears counter that BKR’s year-to-date rally has already priced in the good news, leaving the stock exposed to Middle East execution risk and Chart Industries integration complexity.
The numbers were hard to argue with. Revenue of $6,587 million beat the $6,328 million consensus by 4.1%. Adjusted EPS of $0.58 came in 17.5% above estimates. Adjusted EBITDA of $1,158 million beat by 12.2%. It was the fourth consecutive quarter Baker Hughes beat on both revenue and earnings.
IET drove the result. Orders reached $4.9 billion, the third straight quarter above $4 billion, pushing the IET’s remaining performance obligation (RPO), meaning contracted revenue not yet recognized, to a record $33.1 billion. IET EBITDA margins hit 20.2%, up 310 basis points year-over-year, on favorable backlog pricing and productivity gains.
The oilfield services segment (OFSE) saw a 9% sequential revenue decline as Middle East disruptions weighed on activity, though it still beat EBITDA guidance.
CEO Lorenzo Simonelli was direct: “Despite significant disruptions in the Middle East, our teams executed at a high level and delivered results that exceeded our guidance range.” He raised the long-term IET order target, saying Baker Hughes is “increasingly confident” its Horizon 2 IET orders will exceed $40 billion by 2028. That matters because IET backlog visibility is now the core of the investment thesis.
On April 13, Baker Hughes also announced the sale of Waygate Technologies to Hexagon for approximately $1.45 billion in cash. Combined with two earlier transactions, the company expects roughly $3 billion in gross proceeds from portfolio actions in 2026, capital directed toward the Chart Industries acquisition and balance sheet reduction.
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Is Baker Hughes Undervalued Today?
The central question is whether the stock’s re-rating is justified. BKR now trades at nearly 14x NTM EV/EBITDA and around 29x NTM P/E. In March 2025, those same multiples sat at roughly 9.5x and 17x.
The expansion reflects the market beginning to price IET less like an oilfield equipment supplier and more like an industrial technology business, which typically commands a higher multiple because of longer contract cycles, recurring service revenue, and lower commodity sensitivity.
Peer context helps calibrate that premium. SLB and Halliburton trade at roughly 10.8x and 9.6x NTM EV/EBITDA, respectively, well below BKR’s current level. Neither produces the heavy turbomachinery that anchors IET’s LNG and power systems business. TechnipFMC, with more infrastructure exposure, trades at around 14x, close to where BKR sits. On that basis, the premium over pure-play oilfield peers is defensible given IET’s backlog visibility and margin profile.
The Middle East conflict is the near-term pressure point. Management estimates the Strait of Hormuz closure has affected over 10% of global oil volumes, with the waterway not expected to fully reopen until the second half of 2026. CFO Ahmed Moghal guided Q2 OFSE revenue at $3.2 billion, with the Middle East region potentially declining more than 20% sequentially.
The paradox worth understanding is that the same disruption weighing on near-term OFSE activity is accelerating the IET pipeline. Energy security has moved to the top of government and corporate agendas globally, and the response requires exactly what Baker Hughes sells: gas compression, LNG liquefaction equipment, and distributed power generation. Simonelli noted on the call that 20% of worldwide LNG capacity is currently offline, creating urgency around new project decisions.
Baker Hughes booked $1.4 billion in Power Systems orders in Q1 alone and is effectively sold out of its NovaLT gas turbines through 2028. Simonelli described the behind-the-meter power market, meaning power deployed directly at customer sites rather than through the central grid, as potentially reaching $60 billion by 2030 in management’s view.
The free cash flow story also improves as Chart closes and backlog converts at higher IET margins. That trajectory is what underpins the mid-case model. The offsetting risk is execution: Chart integration at this scale is complex, the Street consensus target of around $63 sits below the current price, and the analyst community as a group does not currently believe the multiple is justified.
That gap is the clearest signal that the stock is priced for continued strong execution with limited room for error.
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TIKR Advanced Model Analysis
- Current Price: $68.94
- Target Price (Mid): ~$92
- Potential Total Return: ~33%
- Annualized IRR: ~6% / year
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The TIKR mid-case model projects BKR at around $92 by 12/31/30, representing roughly 33% total return at an annualized IRR of about 6% per year. The two revenue drivers are IET backlog conversion, supported by the record $33.1 billion RPO, and expanding gas technology services CAGR as the growing NovaLT installed base generates aftermarket contracts. The model assumes low-single-digit revenue growth and net income margins expanding toward around 11%, reflecting the mix shift toward higher-margin IET work.
The upside scenario depends on faster LNG project decisions, stronger Chart synergy realization, and power systems demand developing ahead of management’s own projections. The primary downside risk is a prolonged Middle East conflict, a delayed Chart close, or a compression of the industrial premium if IET growth disappoints. The Street consensus at around $63 represents what the stock could look like if the re-rating partially reverses. That gap between ~$63 and ~$92 captures the range of outcomes investors are currently debating.
Conclusion
The metric to watch at Q2 earnings, expected in late July, is Middle East OFSE revenue relative to management’s guidance for a more than 20% sequential decline in the region. A shallower-than-guided decline would confirm the OFSE headwinds are temporary. Persistent or deepening disruption would pressure the full-year thesis.
Baker Hughes is executing a credible shift toward industrialized energy technology. Q1 showed that execution is outpacing analyst models. At nearly 14x forward EV/EBITDA, the stock prices are sustained in momentum from a $33 billion backlog. Whether that is warranted is the question each investor needs to answer.
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Should You Invest in Baker Hughes?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
