Baker Hughes (BKR) just landed a substantial equipment order tied to Venture Global's Cloud Connector Pipeline and Plaquemines LNG expansion in Louisiana, putting its gas compression and liquefaction technology squarely in focus for investors.
Despite this new LNG equipment order, Baker Hughes’ recent share price return has cooled, with the stock down 12.4% over the past month and 7.7% over 90 days. Year to date the share price return is 20.45%, and the 5 year total shareholder return is 178.35%, which reflects strong longer term momentum even as investors reassess near term expectations.
Capitalize on Baker Hughes’ LNG momentum by scanning a curated set of infrastructure focused energy players in our 38 power grid technology and infrastructure stocks.The recent pullback in Baker Hughes sits awkwardly beside fresh LNG wins and solid reported earnings growth. Are investors reacting to fundamentals, or has sentiment simply swung too far and set up a different valuation read?
Most Popular Narrative: 20.3% Undervalued
Baker Hughes last closed at $56.78, while the most followed narrative places fair value closer to $71.24. This frames the recent LNG news inside a wider rerating story anchored in energy transition and recurring revenue.
Baker Hughes is actively expanding into fast-growing markets like distributed power solutions for data centers and new energy infrastructure (hydrogen, CCS, geothermal), capitalizing on the robust increase in global energy demand, especially from digital infrastructure and emerging markets. This positions the company for long-term recurring revenue growth and higher-margin opportunities. The company's momentum in securing large-scale service contracts, framework agreements, and technology-driven orders (such as for data centers, LNG, CCS, and recurring gas tech services) is contributing to an all-time high IET backlog, building visibility into future revenue and supporting earnings durability.
See why 34 investors see Baker Hughes as 20% undervalued.
The narrative framework uses a discount rate of 7.57% and arrives at a fair value estimate of $71.24. This sits above both the last close and the Simply Wall St fair value marker of $71.24 cited in analyst summaries. That view aligns with statement data indicating Baker Hughes is trading 47.3% below an internal fair value estimate based on future cash flow and that the stock is priced below the SWS DCF value of $107.65.
In addition, Baker Hughes is flagged as good value relative to peers, with its P/E ratio of 18.2x sitting under both the estimated fair P/E of 21.5x and the US Energy Services industry average of 24.9x. Analysts also see the current share price below their average target, with a 27.3% implied upside according to their models. Those checks, combined with annual revenue growth of 8.2% and forecast earnings growth of 7.88% per year, support a narrative that the market is not fully pricing in the business mix shift toward Industrial & Energy Technology alongside LNG orders like the recent Plaquemines deal.
Result: Fair Value of $71.24 (UNDERVALUED)
Still, the narrative around Baker Hughes can break if trade tariffs and supply chain costs squeeze margins, or if faster decarbonization curbs long term LNG and gas demand.
Find out about the key risks to this Baker Hughes narrative.
Next Steps
Whether you are optimistic or cautious about Baker Hughes after the recent LNG order and the current valuation gap, it is useful to move quickly and review the full data set yourself. To see which potential bright spots others are focusing on, review the 5 key rewards.
Looking for more Baker Hughes investment ideas?
Do not stop with Baker Hughes. Broaden your watchlist now, because the next move that really reshapes your returns could be sitting in plain sight.
- Target quality at a discount by scanning a curated set of resilient opportunities using our 35 high quality undervalued stocks.
- Strengthen your downside protection and focus on sturdier balance sheets through the Simply Wall St screener built around the 11 resilient stocks with low risk scores.
- Spot lesser known opportunities with solid fundamentals before the crowd pays attention by running a tailored search through the 15 high quality undiscovered gems.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com