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1. Company Snapshot

1.a. Company Description

Baker Hughes Company provides a portfolio of technologies and services to energy and industrial value chain worldwide.It operates through four segments: Oilfield Services (OFS), Oilfield Equipment (OFE), Turbomachinery & Process Solutions (TPS), and Digital Solutions (DS).The OFS segment offers exploration, drilling, wireline, evaluation, completion, production, and intervention services; and drilling and completions fluids, wireline services, downhole completion tools and systems, wellbore intervention tools and services, pressure pumping systems, oilfield and industrial chemicals, and artificial lift technologies for oil and natural gas, and oilfield service companies.


The OFE segment provides subsea and surface wellheads, pressure control and production systems and services, flexible pipe systems for offshore and onshore applications, and life-of-field solutions, including well intervention and decommissioning solutions; and services related to onshore and offshore drilling and production operations.The TPS segment provides equipment and related services for mechanical-drive, compression, and power-generation applications across the oil and gas industry.Its product portfolio includes drivers, compressors, and turnkey solutions; and pumps, valves, and compressed natural gas and small-scale liquefied natural gas solutions.


This segment serves upstream, midstream, downstream, onshore, offshore, and industrial customers.The DS segment provides sensor-based process measurements, machine health and condition monitoring, asset strategy and management, control systems, as well as non-destructive testing and inspection, and pipeline integrity solutions.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 is based in Houston, Texas.

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1.b. Last Insights on BKR

Baker Hughes' recent momentum is driven by increased institutional investment, with Caprock Group LLC and Cibc World Market Inc. acquiring new shares. The company's Q4 earnings report showed key metrics comparing favorably to Wall Street estimates. A significant decrease in short interest, down 26.3% in January, also suggests improving sentiment. According to Marketbeat, Baker Hughes has a consensus rating of "Moderate Buy" from 26 brokerages, with 23 assigning a buy recommendation.

1.c. Company Highlights

2. Baker Hughes' Strong 2025 Results and Promising 2026 Outlook

Baker Hughes delivered a robust financial performance in 2025, with adjusted EBITDA reaching $1.34 billion, a 2% year-over-year increase, and adjusted earnings per share (EPS) rising to $0.78, beating estimates of $0.668. The company's Industrial & Energy Technology (IET) segment drove this growth, achieving a record backlog of $32.4 billion and a book-to-bill ratio exceeding 1x. The adjusted EBITDA margin expanded by 30 basis points to 18.1%, exceeding 18% for the first time.

Publication Date: Feb -02

📋 Highlights
  • Record Adjusted EBITDA:: Q4 adjusted EBITDA reached $1.34 billion, driving full-year adjusted EBITDA to $4.83 billion, surpassing guidance midpoints.
  • IET Segment Growth:: IET achieved 160 bps margin expansion to 20%, with $14.9 billion in orders and a record $32.4 billion backlog.
  • Free Cash Flow Surge:: Generated $1.3 billion in Q4 free cash flow, contributing to a full-year record of $2.7 billion.
  • New Energy Momentum:: Booked $2 billion in full-year New Energy orders, exceeding targets, with 2026 guidance of $2.4–2.6 billion.
  • Power Systems Expansion:: Power systems orders hit $2.5 billion in 2025, including $1 billion for data centers, with $3 billion anticipated by 2027.

Segmental Performance

The IET segment delivered EBITDA of $761 million, resulting in significant margin expansion of 160 basis points to 20%. The segment achieved a record $14.9 billion of orders, driven by strong pipelines in power systems, data center intake, and gas infrastructure. As Lorenzo Simonelli, CEO of Baker Hughes, noted, the company's power portfolio expansion with thermal management capabilities and integrated trigeneration power solutions will drive long-term growth and operational resilience.

Valuation and Outlook

With a P/E Ratio of 20.81 and an EV/EBITDA of 17.26, the market appears to have priced in a significant portion of Baker Hughes' growth potential. However, the company's guidance for 2026 suggests continued momentum, with organic adjusted EBITDA expected to grow in the mid-single digit range and record IET orders anticipated. Analysts estimate next year's revenue growth at 5.6%, indicating a positive outlook.

Growth Drivers

Baker Hughes is well-positioned to capitalize on the global power demand multiyear growth cycle, with a range of solutions available and in development. The company's power systems orders totaled $2.5 billion in 2025, with $1 billion directly linked to data center applications. The expected doubling of investment in AI infrastructure to $1 trillion by the end of this decade presents a substantial opportunity for Baker Hughes.

Margin Expansion

The company's comprehensive review has identified opportunities for cost-out programs, which will result in quick paybacks and drive further margin expansion through 2026 and beyond. Ahmed Moghal, CFO, noted that the company expects a 20% margin in IET in 2026, representing a 150 basis point year-over-year increase, driven by the conversion of higher-margin gas equipment backlog and growth in gas services.

3. NewsRoom

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Lansforsakringar Fondforvaltning AB publ Boosts Stake in Baker Hughes Company $BKR

11:06

Source: defenseworld.net

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Cardano Risk Management B.V. Trims Holdings in Baker Hughes Company $BKR

Feb -17

Source: defenseworld.net

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BAKER HUGHES AND VALLOUREC SIGN A MEMORANDUM OF UNDERSTANDING ON UNDERGROUND HYDROGEN STORAGE WITH THE DELPHY SOLUTION

Feb -17

Source: globenewswire.com

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Compared to Estimates, Baker Hughes (BKR) Q4 Earnings: A Look at Key Metrics

Feb -16

Source: zacks.com

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Envestnet Asset Management Inc. Sells 190,746 Shares of Baker Hughes Company $BKR

Feb -16

Source: defenseworld.net

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Baker Hughes Company (NASDAQ:BKR) Short Interest Down 26.3% in January

Feb -16

Source: defenseworld.net

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Aberdeen Group plc Decreases Position in Baker Hughes Company $BKR

Feb -16

Source: defenseworld.net

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Caprock Group LLC Acquires Shares of 28,944 Baker Hughes Company $BKR

Feb -15

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.78%)

6. Segments

Oilfield Services & Equipment

Expected Growth: 4.0%

The Oilfield Services & Equipment segment growth of 4.0% is driven by increased drilling activity, higher demand for energy, and rising investments in exploration and production. Additionally, Baker Hughes' technological advancements and improved operational efficiency contribute to the growth, as the company benefits from its diversified portfolio and expanding presence in key markets.

Industrial & Energy Technology

Expected Growth: 3.5%

The Industrial & Energy Technology segment growth of 3.5% is driven by increasing demand for digital transformation, energy efficiency, and sustainability solutions. Key drivers include investments in renewable energy, modernization of existing infrastructure, and adoption of Industrial Internet of Things (IIoT) technologies. Additionally, Baker Hughes' focus on innovative solutions such as hydrogen fuel cells and carbon capture technology contributes to growth.

7. Detailed Products

Drilling Services

Provides drilling services and equipment to optimize wellbore placement and improve drilling efficiency

Evaluation and Intervention Services

Offers evaluation and intervention services to optimize well performance and extend well life

Completion and Production Services

Provides completion and production services to optimize well production and extend well life

Digital Solutions

Offers digital solutions to optimize oil and gas operations, including data analytics and artificial intelligence

Oilfield Equipment

Manufactures and supplies oilfield equipment, including pumps, valves, and compressors

Turbomachinery and Process Solutions

Provides turbomachinery and process solutions for oil and gas, power generation, and industrial applications

Chemicals and Materials

Manufactures and supplies chemicals and materials for oil and gas operations, including drilling and completion fluids

8. Baker Hughes Company's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Baker Hughes Company is medium due to the presence of alternative products and services in the oil and gas industry.

Bargaining Power Of Customers

The bargaining power of customers for Baker Hughes Company is high due to the concentration of large oil and gas companies that have significant purchasing power.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Baker Hughes Company is low due to the company's large scale of operations and diversified supply chain.

Threat Of New Entrants

The threat of new entrants for Baker Hughes Company is low due to the high barriers to entry in the oil and gas industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for Baker Hughes Company is high due to the competitive nature of the oil and gas industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 28.15%
Debt Cost 4.83%
Equity Weight 71.85%
Equity Cost 11.12%
WACC 9.35%
Leverage 39.18%

11. Quality Control: Baker Hughes Company passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Cheniere Energy Partners

A-Score: 7.1/10

Value: 7.2

Growth: 6.8

Quality: 7.1

Yield: 10.0

Momentum: 4.0

Volatility: 7.7

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Energy Transfer

A-Score: 6.4/10

Value: 7.3

Growth: 3.6

Quality: 3.9

Yield: 10.0

Momentum: 4.0

Volatility: 9.7

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Williams

A-Score: 6.2/10

Value: 2.0

Growth: 4.3

Quality: 5.7

Yield: 9.0

Momentum: 7.0

Volatility: 9.0

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Baker Hughes

A-Score: 5.7/10

Value: 5.1

Growth: 4.2

Quality: 6.1

Yield: 4.0

Momentum: 8.0

Volatility: 7.0

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Schlumberger

A-Score: 5.3/10

Value: 5.6

Growth: 4.9

Quality: 6.0

Yield: 5.0

Momentum: 3.5

Volatility: 6.7

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Halliburton

A-Score: 5.0/10

Value: 5.5

Growth: 5.2

Quality: 4.8

Yield: 5.0

Momentum: 3.5

Volatility: 5.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

63.26$

Current Price

63.26$

Potential

-0.00%

Expected Cash-Flows