BKR (BKR) Stock Analysis
Verdict: HOLD
LNG turbomachinery strength and 5.5% FCF yield support double-digit upside, counterbalanced by $13.6B Chart integration and insider selling.
Investment score: 62/100
Is BKR Stock Worth Reviewing? AI Model Thesis
Baker Hughes combines market leadership in LNG turbomachinery with steady 5.5% FCF yield, but integration risks from its Chart Industries transaction and persistent insider selling justify a HOLD rating while awaiting chart stabilization.
Peers
| Peer | P/E | P/B | P/S | EV/EBITDA | ROIC % | Net margin % |
|---|---|---|---|---|---|---|
| SLB | 24.73 | 2.96 | 2.10 | 12.07 | — | 0.08 |
| HAL | 17.14 | 2.49 | 1.22 | 8.08 | — | 0.07 |
| NOV | 76.54 | 1.15 | 0.82 | 10.56 | — | 0.01 |
| WFRD | 16.50 | 3.38 | 1.26 | 7.54 | — | 0.08 |
| SEI | 68.60 | 4.60 | 5.64 | 24.40 | — | 0.07 |
Should You Buy or Sell BKR Stock? Model Reasoning
The model recommends HOLD for Baker Hughes based on strong fundamental execution (4 straight earnings beats, 2025 FCF of $2.54B, and low net debt/EBITDA of 0.11x) offset by technical weakness (-10.9% over 30 days) and consistent insider selling (12 sells, 0 buys). At 18.25x P/E, BKR trades at a noticeable discount to SLB (24.73x) while offering robust LNG backlog growth, but near-term indigestion from the Chart Industries acquisition creates a multi-month consolidation pattern.
BKR Fair Value & Price Target — AI Valuation
- Model Assumptions: ["5-year FCF CAGR of 8.0% driven by Chart Industries integration and power generation equipment demand.","Operating margin stabilizes between 13.5% and 14.5% (vs 13.97% in 2025).","Discount rate of 10.0% and terminal growth rate of 2.5%.","Effective tax rate remains near 22%."]
BKR Risk & Opportunity Analysis
Key Investment Risks
- Integration complexity and leverage overhang from $13.6B Chart Industries transaction — Failure to efficiently capture expected operational synergies or unexpected cash burn from Chart Industries could depress net margin (currently 11.17%) and delay balance sheet deleveraging.
- Executive insider selling signaling limited short-term upside sentiment — Heavy insider selling across 12 recent transactions with 0 buys—including CEO Lorenzo Simonelli liquidating 181,411 shares at $58.43 in June 2026—suggests executive caution on near-term stock price momentum.
- Cyclical slowdown in global oil & gas offshore/onshore capital expenditure — A drop in global crude/LNG prices or delay in international FID decisions could reduce OFSE rig counts (currently 269 in Permian) and push revenue growth below the 2027 consensus of $31.32B.
- Negative price momentum and 30-day technical weakness (-10.9%) — Technical breakdown below support around $55.00 could open downside toward the 52-week low of $43.92, breaking current consolidation channel.
Growth Opportunities & Upside Drivers
- Dominant position in LNG turbomachinery and power generation expansion driven by global gas demand — BKR's Industrial & Energy Technology (IET) segment provides higher-margin, long-cycle backlog (operating margin 13.97%) that insulates earnings from short-term onshore North American drilling swings, targeting 2028 EPS consensus of $3.60 vs $2.62 in 2025.
- Attractive valuation relative to large-cap oilfield service peers — Trading at 18.25x TTM P/E and 12.09x EV/EBITDA, BKR trades at a discount to SLB (24.73x P/E) despite delivering higher gross margins (23.6% vs SLB's 16.5%), offering a potential valuation catch-up trade.
- Strong Free Cash Flow yield of 5.5% and fortress balance sheet — 2025 FCF reached $2.54B (up 23.5% YoY from $2.05B in 2024) with cash balances of $3.72B against $7.14B debt, supporting shareholder returns via dividend ($2.36% yield, 29.4% payout ratio) and buybacks.
- Earning surprise streak demonstrates superior operational execution — BKR has beaten consensus EPS in all 4 recent quarters, including a +26.16% surprise in Q2 2026 ($0.64 actual vs $0.51 estimate), confirming strong cost control and pricing power.
BKR Action Plan — Entry, Exit and Stop Loss from the Model View
moderate
aggressive
conservative
Frequently Asked Questions About BKR (BKR)
Is BKR stock a good investment?
The cached TradeMates AI model rates BKR as HOLD with an investment score of 62/100. Baker Hughes combines market leadership in LNG turbomachinery with steady 5.5% FCF yield, but integration risks from its Chart Industries transaction and persistent insider selling justify a HOLD rating while awaiting chart stabilization. This is algorithmic model output, not personal investment advice.
Does BKR pay a dividend?
BKR shows a dividend yield of about 2.36% in the cached stock data. Investors should still verify the latest declared dividend and payout dates.
What does BKR stock do?
Baker Hughes operates as an energy technology company delivering equipment and services across the oil, gas, and industrial energy sectors. Its operational footprint is divided into Oilfield Services & Equipment (OFSE) for upstream drilling/production and Industrial & Energy Technology (IET) for gas technology, power generation, and carbon management.
What is BKR stock's price target?
This cached page does not contain a precise model fair value for BKR.
Is BKR stock a buy?
The TradeMates model verdict for BKR is HOLD with an investment score of 62/100. Treat this as a model signal to review, not a personal buy recommendation.
Is BKR a good dividend stock?
BKR may be relevant for dividend investors because the cached data shows a yield near 2.36%, but dividend quality also depends on payout safety, balance sheet strength and cash flow.