Goldman Sachs analyst Neil Mehta has maintained their bullish stance on BKR stock, giving a Buy rating on February 26.
Neil Mehta has given his Buy rating due to a combination of factors that suggest Baker Hughes Company has an underappreciated growth potential. The stock’s year-to-date underperformance relative to the energy sector has largely priced in the market’s concerns over softening LNG demand and scaled-back capacity expansion in the Middle East. Mehta believes that this negative sentiment is now reflected in the company’s current valuation, which he sees as offering a 20% upside. Despite potential slower LNG order growth, there is an anticipation of increased activity in aftermarket services and growth in non-LNG related businesses, particularly Industrial Products and New Energy sectors, which could drive future performance.
Moreover, despite the initial negative reaction to potential delays in the Safaniya project and the announcement of Saudi capacity reductions, Mehta’s analysis suggests that these will have a limited impact on the company’s earnings projections. He remains positive on the company’s ability to improve profitability in the Oilfield Services and Equipment (OFSE) business. Additionally, Mehta’s outlook includes an estimated margin improvement of approximately 90 basis points in 2024. This combination of factors, including underappreciated growth avenues and the potential for margin enhancement, supports Mehta’s Buy rating for Baker Hughes Company.
In another report released on February 26, Seaport Global also maintained a Buy rating on the stock with a $29.20 price target.
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Baker Hughes Company (BKR) Company Description:
Texas-based Baker Hughes Co. provides a portfolio of technologies and services worldwide. The company operates through four segments: Oilfield Services (OFS), Oilfield Equipment (OFE), Turbomachinery & Process Solutions (TPS), and Digital Solutions (DS).
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