Caesars Entertainment misses Q2 earnings expectations, shares edge lower
Monday, Baker Hughes (NASDAQ:BKR), a $45.7 billion energy technology company currently trading at $47.4 near its 52-week high, saw its price target increased from $51.00 to $57.00 by analysts at TD Cowen, who also maintained a Buy rating on the stock. The firm’s assessment followed Baker Hughes’ robust fourth-quarter performance and an optimistic order outlook, particularly in Gas Technology (Gas Tech), which has been outperforming expectations. According to InvestingPro data, the company has delivered an impressive 63.4% return over the past year.
TD Cowen highlighted Baker Hughes’ strong execution on margin expansion, viewing the 20% margin targets as a stepping stone towards achieving "best-in-class" levels. The company’s recent earnings before interest, taxes, depreciation, and amortization (EBITDA) reached $4.5 billion, surpassing both consensus and guidance, attributed to higher revenue and improved margins in the Industrial Energy Technology (IET) sector. InvestingPro analysis reveals that Baker Hughes has achieved a perfect Piotroski Score of 9, indicating exceptional financial strength.
The stock’s recent outperformance, which exceeded the Oil Services ETF (OIH) by approximately 430 basis points, was driven by positive developments in IET orders and outlook, as well as the anticipated growth in Gas Tech Services (GTS). While Baker Hughes has a history of surpassing guidance, leading to investor expectations for such beats, the current outperformance is particularly linked to these sectors. With a P/E ratio of 15x and annual revenue of $27.8 billion, the company maintains strong fundamentals. Discover 12 more exclusive insights about Baker Hughes on InvestingPro, including detailed valuation metrics and growth projections.
Despite the positive fourth-quarter results, TD Cowen’s estimates for 2025 remain largely unchanged. However, projections for 2026 and beyond have been adjusted to reflect higher anticipated IET revenue and stronger margins in both IET and Oilfield Services and Equipment (OFSE). The revised Discounted Cash Flow (DCF) based target price accounts for an 8.75% weighted average cost of capital (WACC). The upgrade in the price target reflects confidence in Baker Hughes’ continued growth and performance within the energy technology sector, further supported by its sustainable 1.99% dividend yield and strong market position.
In other recent news, Baker Hughes has been the subject of multiple analysts’ upgrades. Stifel has increased its price target for the company to $54 from $48, focusing on the Industrial Energy Technology (IET) segment as a key driver for future growth. JPMorgan also raised its stock target to $52, noting the potential for further margin expansion and growth in the IET segment. Goldman Sachs lifted its stock target to $53, emphasizing opportunities for growth and margin expansion. Citi analyst Scott Gruber increased the price target to $54, citing sustained strength in order intake in the IET segment and the potential for margin expansion. CFRA upgraded Baker Hughes’ stock from Hold to Buy, setting a new price target of $54, due to positive prospects in the gas processing equipment market. These recent developments indicate a positive outlook for Baker Hughes from various financial institutions.
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