BKR Stock Forecast & Price Target

Baker Hughes has restructured its operations into two key segments, oilfield services and equipment (OFSE) and industrial and energy technology (IET), which positions the company strategically within the energy sector. The positive outlook is bolstered by anticipated revenue growth and margin expansion in both segments driven by increased demand, improved pricing, and better fixed cost absorption, with global electricity demand projected to grow significantly. Furthermore, Baker Hughes's disciplined operational improvements and strong execution capabilities have resulted in consistent margin expansion, increasing confidence in its order flow and revenue prospects, exemplified by securing $2.5 billion in Power Systems orders for 2025.

Baker Hughes has faced a downward revision in its 2Q25 EBITDA estimates, with the oilfield services and equipment segment seeing a 3% reduction resulting in an expected EBITDA of $669 million, contributing to an overall 1% decline in total EBITDA to $1,185 million. The company's projections indicate that revenues and margins for both the industrial and energy technology segment, as well as oilfield services, are anticipated to underperform due to lower activity levels and reduced fixed cost absorption. Furthermore, significant risks such as reduced industry activity, potential underperformance on energy transition investments, increased regulations, and customer consolidation contribute to a fundamentally negative outlook on Baker Hughes's stock.