Baker Hughes (BKR): Exploring Current Valuation After Recent Share Performance

Baker Hughes (BKR) has been on investors’ radar as its stock moved slightly over the past week, despite no major headlines. With shares showing 11% growth over the past 3 months, recent performance sparks some renewed interest.

See our latest analysis for Baker Hughes.

Looking at the bigger picture, Baker Hughes’ share price has advanced over the past year, despite some recent volatility. The stock boasts a 22% total shareholder return in the last twelve months and a striking 292% return over five years, which indicates momentum is still very much on the company’s side.

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With shares up significantly in recent years, the key question is whether Baker Hughes is still trading at a bargain or if the current price already reflects all the company’s future growth. Could there still be a buying opportunity?

Most Popular Narrative: 12.4% Undervalued

Baker Hughes’ last close at $45.04 is below the most closely followed narrative fair value of $51.43, a gap driven by a mix of structural growth drivers and renewed expectations for higher-margin business segments. The narrative reflects both optimism about long-term earnings quality and some debate about short-term growth limits.

The company's strong momentum in securing large-scale service contracts, framework agreements, and technology-driven orders (such as for data centers, LNG, CCS, and recurring gas tech services) is driving an all-time high IET backlog, building strong visibility into future revenue and supporting sustained earnings durability.

Read the complete narrative.

Curious about the driving force behind this valuation? There is a bold projection at the heart of this narrative: if you want to know the profit engine and market expectations reflected in that target, you’ll want to dig into the full story. See which quantitative assumptions are creating a fair value that is catching attention, and why the analyst community sees more in Baker Hughes than recent headlines reveal.

Result: Fair Value of $51.43 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent cost inflation and Baker Hughes’ ongoing exposure to volatile oil and gas markets could still present challenges to the growth highlighted in analyst forecasts.

Find out about the key risks to this Baker Hughes narrative.

Another View: Multiples Offer a Different Perspective

While fair value estimates suggest Baker Hughes is undervalued, a look at its price-to-earnings ratio paints a more complicated picture. At 14.6x, it sits above the industry average of 14.5x and peer average of 11.8x, yet below the fair ratio of 16.9x. This suggests the potential for both opportunity and valuation risk, raising the question of which outcome may ultimately play out.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Baker Hughes Narrative

If you want to interpret the numbers differently or see an alternative angle, you can dive into the data and create your own perspective in just a few minutes. Do it your way

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Baker Hughes.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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