Baker Hughes Company (BKR) Stock Valuation — PE Analysis
Oil & Gas Equipment & Services · NASDAQ
Current Price
$63.14
PE Ratio (TTM)
20.1x
Intrinsic Value
$70.4
+10.3% 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 PE valuation
A base case PE valuation for BKR estimates a fair value of about $70.4 per share, against a current price of $63.14. The model assumes 7.3% annual earnings growth, a 20x target PE multiple, and a 10% discount rate.
Intrinsic Value
$70.4
Margin of safety
+10.3%
Expected annual return
+2.2%
Base case assumptions: 7.3% annual earnings growth, 20x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the BKR PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Baker Hughes Company respond.
Open PE 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 PE Stock Valuation Data
PE Ratio (TTM)
20.1x
PEG Ratio
2.82
Earnings Yield
4.98%
ROE (TTM)
16.8%
Revenue/Share (TTM)
$28.17
Dividend Yield
1.46%
Debt/Equity
0.84x
Frequently Asked Questions
What is the PE ratio of BKR?
The trailing twelve-month PE ratio of BKR reflects how much investors pay per dollar of Baker Hughes Company's earnings. This metric is most useful when compared to Oil & Gas Equipment & Services peers and the company's own historical range.
Is BKR overvalued based on PE ratio?
BKR's PE of 20.1x combined with a PEG ratio of 2.82 provides a growth-adjusted perspective. A PEG above 2.0 suggests BKR may be richly valued even accounting for growth. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Oil & Gas Equipment & Services, a DCF analysis may be more appropriate.
How do I value BKR stock using PE ratio?
To value Baker Hughes Company using PE: (1) Compare the current PE (20.1x) against the Oil & Gas Equipment & Services median to assess relative pricing, (2) check the PEG ratio (2.82) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of BKR?
BKR's PEG ratio is 2.82, calculated by dividing the PE ratio (20.1x) by the expected earnings growth rate. A PEG above 2.0 often signals the stock is priced aggressively relative to its growth trajectory. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for BKR stock valuation?
PE ratio gives a quick relative read — how BKR is priced versus Oil & Gas Equipment & Services peers. DCF provides an absolute value based on projected free cash flows. For BKR, with a strong ROE of 16.8%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See BKR DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Energy valuationsP/E and DCF value BKR with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic 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.