Baker Hughes Company (BKR) Stock Valuation — DCF Analysis
Oil & Gas Equipment & Services · NASDAQ
Current Price
$63.14
Intrinsic Value
$66.57
+5.1% margin of safety
COMPETITIVE MOAT
↑Long-term Equinor contracts
Extended multi-year contracts with Equinor in the North Sea solidify Baker Hughes' role in critical drilling and intervention services. This demonstrates strong customer loyalty and recurring revenue streams.
↑Rig count leadership
Baker Hughes' data on rising US rig counts highlights its central position in tracking and serving the active oil and gas exploration sector. This provides valuable market insights and operational leverage.
↑Integrated service offerings
Providing a comprehensive suite of drilling, well services, and intervention solutions allows Baker Hughes to offer end-to-end support. This integrated approach fosters deeper client relationships and operational efficiencies.
INVESTMENT RISKS
↓Zacks Strong Sell ratings
Multiple 'Strong Sell' ratings from Zacks indicate significant concerns about Baker Hughes' financial performance or future prospects. This suggests potential headwinds impacting the company's valuation.
↓Geopolitical oil trade risks
The mention of the Strait of Hormuz trade implies vulnerability to geopolitical instability affecting global oil flows. Disruptions in these key shipping lanes could impact demand for services.
↓Commodity price volatility
The oil services sector is inherently tied to fluctuating oil prices. Downturns in crude prices can directly reduce exploration and production activity, impacting Baker Hughes' revenue.
Base case
BKR base case valuation
A base case discounted cash flow model for BKR estimates an intrinsic value of about $66.57 per share, against a current price of $63.14. The model assumes 7.6% annual free cash flow growth, a 10.0% discount rate, and a 27x exit multiple.
Intrinsic Value
$66.57
Margin of safety
+5.1%
Expected annual return
+1.1%
Base case assumptions: 7.6% annual growth, 10.0% discount rate, 27x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the BKR valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Baker Hughes Company respond.
Open DCF Calculator for BKRCompany Overview
Based in Houston, Texas, Baker Hughes Company is a global provider of diverse technologies and services tailored for the energy and industrial sectors. The company operates through four primary business segments: Oilfield Services (OFS), Oilfield Equipment (OFE), Turbomachinery & Process Solutions (TPS), and Digital Solutions (DS). Oilfield Services (OFS) assists oil and natural gas companies and other service providers with solutions for exploration, drilling, well evaluation, completion, production, and intervention. This segment supplies various products, including drilling and completion fluids, wireline tools, downhole completion systems, wellbore intervention equipment, pressure pumping technologies, oilfield and industrial chemicals, and artificial lift systems. Oilfield Equipment (OFE) delivers subsea and surface wellheads, pressure control apparatus, production systems and associated services, along with flexible pipe solutions for both offshore and onshore applications. It also provides comprehensive lifecycle services, such as well intervention and decommissioning, in addition to supporting onshore and offshore drilling and production activities. Turbomachinery & Process Solutions (TPS) specializes in equipment and related services for mechanical drive, compression, and power generation needs across the oil and gas industry. Its extensive product range includes drivers, compressors, full-system solutions, pumps, valves, and technologies for compressed natural gas and small-scale liquefied natural gas. This segment caters to upstream, midstream, downstream, onshore, offshore, and various industrial clients. Digital Solutions (DS) offers advanced digital tools and services, including sensor-based process measurement, machine health and condition monitoring, asset management and strategy, and control systems. Additionally, it provides non-destructive testing, inspection, and pipeline integrity management solutions. The company was rebranded as Baker Hughes Company in October 2019, having previously operated under the name Baker Hughes, a GE company.
Financial Metrics — BKR Stock Valuation Data
Revenue/Share (TTM)
$28.17
FCF/Share (TTM)
$2.32
ROIC (TTM)
8.3%
ROE (TTM)
16.8%
P/FCF
27.3x
EV/EBITDA
12.5x
FCF Yield
3.66%
Debt/Equity
0.84x
Based on trailing twelve-month data, BKR shows a free cash flow per share of $2.32 and a ROIC of 8.3%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 27.3x and FCF yield of 3.66% are important context metrics when evaluating BKR's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of BKR?
Baker Hughes Company currently generates $2.32 in free cash flow per share. At the current price of $63.14, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is BKR undervalued?
BKR trades at a P/FCF ratio of 27.3x with a free cash flow yield of 3.66%. This P/FCF is in a moderate range. However, whether BKR is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value BKR stock using DCF?
To perform a DCF valuation on Baker Hughes Company: (1) Start with the trailing free cash flow per share ($2.32) as the base, (2) project future FCF growth over 5-10 years based on Oil & Gas Equipment & Services industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting BKR's risk profile — with a debt-to-equity of 0.84x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to BKR?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Baker Hughes Company, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Oil & Gas Equipment & Services trends, then discounting those amounts to today's dollars. BKR's ROIC of 8.3% shows moderate capital returns.
How does WACC affect BKR stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For BKR, with a debt-to-equity ratio of 0.84x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 12.5x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See BKR PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Energy valuationsDCF and P/E value BKR with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.