BKR Stock Forecast & Price Target

Baker Hughes's recent reorganization into two segments—oilfield services and equipment (OFSE) and industrial and energy technology (IET)—positions the company well to benefit from increased global demand, as approximately 75% of OFSE sales occur outside North America. The firm's anticipated revenue growth and margin expansion are supported by higher industry utilization, better pricing dynamics, and strong service demand, particularly as commodity prices rise, leading to increased spending on exploration and production (E&P). Additionally, the potential for consolidation in the industry may enhance competitive dynamics, contributing to improved pricing and further positive earnings before interest, taxes, depreciation, and amortization (EBITDA) growth, exemplified by the projected increase to $469 million in IET EBITDA.

Baker Hughes's financial outlook appears negative due to anticipated slower international oilfield services and equipment (OFSE) activity, prompting a 3% reduction in the 2Q25 OFSE EBITDA estimate to $669 million, and an overall EBITDA estimate decrease of 1% to $1,185 million. There are concerns that both industrial and energy technology (IET) revenues and OFSE margins will fall short of expectations as activity levels do not meet base case scenarios, leading to lower utilization and consequently reduced fixed cost absorption. Additionally, risks such as reduced industry activity, potential low returns from energy transition investments, and increased regulatory pressures could further impact the performance negatively.