BKR Stock Forecast & Price Target

Baker Hughes has demonstrated a positive outlook as its revenue from the industrial and energy technology (IET) segment continues to grow, with new energy orders reaching $1.3 billion, a 70% year-over-year increase, and projected to rise further to between $1.4 billion and $1.6 billion by 2025. The company experienced earnings that surpassed estimates by 4%, supported by management's optimistic 2025 outlook, which anticipates orders in the IET segment to contribute significantly to overall performance, positioning Baker Hughes to outperform the broader Oilfield and Equipment Services (OIH) sector. Additionally, robust trends such as higher commodity prices, increased service demand, and improved operational efficiencies are expected to enhance both revenue and margins, driving the company's continued growth and expansion of shareholder returns.

Baker Hughes is facing a challenging financial outlook as global upstream spending is expected to decline slightly year-over-year, particularly in North America, which is projected to experience a modest single-digit decrease, while international markets are likely to remain flat or decrease slightly. The firm anticipates that both its Industrial and Energy Technology (IET) and Oilfield Services and Equipment (OFSE) segments will struggle to achieve revenue and margin targets due to lower activity levels, especially in key markets such as Mexico and Saudi Arabia, leading to reduced fixed cost absorption. Additionally, the company confronts various risks, including diminished industry activity, potential underperformance of capital invested in energy transitions, increased regulatory pressures, and cost overruns from fixed-price contracts, all of which could further impair financial performance.