U.S. stocks lower as investors rotate out of tech ahead of Jackson Hole
On Monday, TD Cowen has updated its outlook on shares of Baker Hughes (NASDAQ: BKR), raising the stock's price target to $50.00 from the previous $46.00, while reaffirming a Buy rating on the shares. The adjustment follows Baker Hughes' noteworthy second-quarter performance and positive guidance for the second half of the year.
The firm's analysis highlighted Baker Hughes' outperformance of the Oil Services ETF (OIH) by approximately 450 basis points after a second-quarter earnings beat. The company's guidance for the latter half of the year was above market consensus, driven by stronger margins in both of its business segments and potential revenue growth in its Industrial & Energy Technology (IET) division.
Baker Hughes reported robust order intake, though it is anticipated to normalize in the second half of the year. However, there remains a possibility for additional upside if certain large orders are secured. TD Cowen expressed optimism about Baker Hughes' revenue prospects, particularly in the IET segment, suggesting that the company's internal initiatives are beginning to yield significant results.
The firm's maintained Buy rating indicates a positive outlook on Baker Hughes' stock, suggesting confidence in the company's future performance. The raised price target reflects the firm's belief in the potential for continued growth and profitability for Baker Hughes, based on the company's recent earnings and forward-looking statements.
In other recent news, Baker Hughes has been the focus of several financial firms following impressive earnings and revenue results. Benchmark raised Baker Hughes' stock price target to $42.00, citing anticipated margin improvement and significant global revenue.
The firm noted that over 75% of the company's revenue comes from international operations, providing a predictable revenue stream and higher margins throughout business cycles.
BofA Securities raised its price target for Baker Hughes to $43.00 following a strong second-quarter financial performance, with the company's EBITDA reported to be 8% higher than anticipated. The firm also revised its EBITDA forecasts for Baker Hughes, increasing them by 5% for fiscal year 2024 and 1% for fiscal year 2025.
Goldman Sachs increased its price target for Baker Hughes to $43.00, highlighting the company's strong order performance and operational efficiency. The firm also commended the company's focus on generating free cash flow and returning capital to shareholders.
JPMorgan raised its price target for Baker Hughes to $43.00, acknowledging the company's consistent operational performance and the strategic transformation initiated by CEO Simonelli. The firm also noted that Baker Hughes secured approximately $6.4 billion in IET orders in the first half of 2024, keeping it on track to meet its full-year inbound IET order target.
Citi raised its stock price target for Baker Hughes to $44.00 following the company's exceptional second-quarter performance. The firm noted that the company saw a 100 basis point margin improvement despite the growth of equipment revenue, which typically has lower margins.
InvestingPro Insights
As Baker Hughes (NASDAQ: BKR) garners a positive outlook from TD Cowen, recent data and insights from InvestingPro provide additional context for investors considering the stock.
With two analysts revising their earnings upwards for the upcoming period, the sentiment around Baker Hughes' financial prospects appears to be strengthening. This is further supported by the company's low P/E ratio of 19.12, which suggests that the stock is trading at an attractive valuation relative to its near-term earnings growth.
InvestingPro data indicates that Baker Hughes has a market capitalization of $37.4 billion and a revenue growth of 16% over the last twelve months as of Q2 2024, underscoring the company's solid financial performance. Moreover, the stock's dividend yield of 2.23% as of the latest data point, combined with a history of maintaining dividend payments for 38 consecutive years, makes it an appealing choice for income-focused investors.
For those interested in deeper analysis, InvestingPro offers additional insights, including a total of 9 InvestingPro Tips for Baker Hughes. To explore these tips and gain a more comprehensive understanding of BKR's investment potential, visit https://www.investing.com/pro/BKR. Remember to use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.