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 for growth, as both segments are expected to experience revenue increases and margin expansions due to higher industry utilization and service demand. The company stands to benefit from catalysts such as rising commodity prices, which may enhance exploration and production (E&P) spending, and improved pricing for services that could further strengthen its competitive position and pricing dynamics. Furthermore, the anticipated increase in fixed cost absorption from higher utilization levels suggests a positive financial outlook through improved operational efficiency and EBITDA growth, highlighted by a projected 1% increase in IET EBITDA to $469 million.

Baker Hughes's outlook is negatively impacted by a projected decline in international oilfield services and equipment (OFSE) activity, resulting in a 3% reduction in 2Q25 OFSE EBITDA estimates to $669 million and a 1% decrease in overall EBITDA estimates to $1.185 billion. The company anticipates that revenues and margins for both the industrial and energy technology (IET) and OFSE segments will not meet expectations due to lower utilization rates and reduced fixed cost absorption. Additional risks include decreased industry activity, potential underperformance of capital invested in energy transition initiatives, increased regulatory pressures, and challenges from customer consolidation and fixed pricing contracts.