Baker Hughes Company (BKR) Intrinsic Value & DCF Valuation
Oil & Gas Equipment & Services · NASDAQ
Current Price
$62.34
Intrinsic Value
$38.05
-63.8% margin of safety
What Is Baker Hughes Company's Intrinsic Value?
As of 2026-08-21, the base-case DCF model estimates the intrinsic value of Baker Hughes Company (BKR) at $38.05 per share, compared with a market price of $62.34, a margin of safety of -63.8%. The base case assumes 7.2% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $33.34 to $43.61. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Baker Hughes Company (BKR) Undervalued?
At the current price of $62.34, BKR trades above the base-case intrinsic value estimate by a meaningful margin. By this model the stock looks expensive, though faster growth than assumed would change the picture.
COMPETITIVE MOAT
↑Integrated Technology & Service Portfolio
Baker Hughes offers a comprehensive suite of oilfield equipment and services, creating a sticky ecosystem for customers. This integration fosters strong customer relationships and high switching costs.
↑Global Scale & Infrastructure
Its extensive global presence and established infrastructure provide a significant competitive advantage. This allows for efficient service delivery and deep market penetration worldwide.
↑Recurring Revenue from Services
A substantial portion of revenue comes from ongoing service contracts and aftermarket support. This creates a predictable revenue stream and reinforces customer loyalty.
INVESTMENT RISKS
↓Integration Risk from Acquisitions
The recent Chart acquisition introduces integration challenges and increased debt. Successful deleveraging and synergy realization are critical for financial health.
↓Commodity Price Volatility
The company's performance is inherently tied to volatile oil and gas prices. Fluctuations can impact demand for its services and equipment, affecting revenue and profitability.
↓Geopolitical Instability
Operations in diverse global regions expose Baker Hughes to geopolitical risks. Political instability or sanctions can disrupt supply chains and project execution.
Base case
BKR base case valuation
Intrinsic Value
$38.05
Margin of safety
-63.8%
Expected annual return
-9.4%
Base case assumptions: 7.2% annual growth, 10.0% discount rate, 19.78x exit multiple, 5 year projection. Data as of 2026-08-21.
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
Baker Hughes Co. is a holding company, which engages in the provision of oilfield products, services, and digital solutions. It operates through the Oilfield Services and Equipment (OFSE) and industrial and Energy Technology (IET) segments. The OFSE segment designs and manufactures products and provides services for onshore and offshore oilfield operations. The IET segment combines expertise, technologies, and services for industrial and energy customers including on and off-shore, LNG, pipeline and gas storage, refining, petrochemical, distributed gas, flow and process control, and industrial segments such as nuclear, aviation, automotive, marine, food and beverage, mining, cement and utilities. The company was founded in April 1987 and is headquartered in Houston, TX.
Financial Metrics — BKR Stock Valuation Data
Revenue/Share (TTM)
$27.98
FCF/Share (TTM)
$3.16
ROIC (TTM)
9.2%
ROE (TTM)
16.3%
P/FCF
19.8x
EV/EBITDA
13.1x
FCF Yield
5.05%
Debt/Equity
0.82x
On a trailing twelve-month basis, BKR generates free cash flow per share of $3.16 alongside a ROIC of 9.2%, both central inputs for a DCF valuation. Its P/FCF ratio of 19.8x and FCF yield of 5.05% then frame how BKR is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of BKR?
Baker Hughes Company currently generates $3.16 in free cash flow per share. At the current price of $62.34, 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 19.8x with a free cash flow yield of 5.05%. 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 ($3.16) 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 0.82x, 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 9.2% 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 0.82x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 13.1x, 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 2026-08-21. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.