Baker Hughes Company (NASDAQ:BKR) Just Reported Yearly Earnings: Have Analysts Changed Their Mind On The Stock?

It's been a good week for Baker Hughes Company (NASDAQ:BKR) shareholders, because the company has just released its latest yearly results, and the shares gained 2.2% to US$29.12. The result was positive overall - although revenues of US$26b were in line with what the analysts predicted, Baker Hughes surprised by delivering a statutory profit of US$1.91 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Baker Hughes

Taking into account the latest results, the current consensus from Baker Hughes' 23 analysts is for revenues of US$27.6b in 2024. This would reflect a meaningful 8.2% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 6.8% to US$2.07. In the lead-up to this report, the analysts had been modelling revenues of US$27.7b and earnings per share (EPS) of US$2.07 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$40.43. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Baker Hughes, with the most bullish analyst valuing it at US$49.00 and the most bearish at US$34.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Baker Hughes' past performance and to peers in the same industry. One thing stands out from these estimates, which is that Baker Hughes is forecast to grow faster in the future than it has in the past, with revenues expected to display 8.2% annualised growth until the end of 2024. If achieved, this would be a much better result than the 0.4% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 7.9% annually. So while Baker Hughes' revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$40.43, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Baker Hughes. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Baker Hughes analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Baker Hughes you should know about.

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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.