| Valuation method | Value, € | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 29.50 | -38 |
| Intrinsic value (DCF) | 16.96 | -64 |
| Graham-Dodd Method | 11.50 | -76 |
| Graham Formula | 44.00 | -7 |
Baker Hughes Company (68V.DE) is a global leader in oilfield services, equipment, and digital solutions, headquartered in Houston, Texas. Operating across four key segments—Oilfield Services (OFS), Oilfield Equipment (OFE), Turbomachinery & Process Solutions (TPS), and Digital Solutions (DS)—the company provides comprehensive solutions for the entire lifecycle of oil and gas wells, from drilling to production. Baker Hughes is at the forefront of the energy transition, offering innovative technologies that enhance efficiency, safety, and sustainability in the oil and gas sector. With a market capitalization of approximately €31.8 billion and a workforce of 68,000 employees, the company serves a global clientele, leveraging its expertise in subsea, surface, and digital infrastructure. Baker Hughes is also a key player in the industrial Internet of Things (IIoT), providing cutting-edge digital solutions for asset-intensive industries. As the energy sector evolves, Baker Hughes remains a critical enabler of both traditional hydrocarbon extraction and emerging low-carbon technologies.
Baker Hughes presents a compelling investment case due to its diversified portfolio across oilfield services, equipment, and digital solutions, positioning it well for both traditional energy demand and the energy transition. The company's strong revenue base (€27.8 billion in FY 2024) and net income (€2.98 billion) reflect its operational resilience. With a healthy operating cash flow (€3.33 billion) and manageable debt (€6.02 billion), Baker Hughes maintains financial stability. However, exposure to volatile oil prices and the cyclical nature of the energy sector pose risks. The company's beta of 0.937 suggests moderate market sensitivity, making it a relatively stable pick within the energy sector. Investors may also appreciate its dividend yield, supported by a payout of €0.82676 per share. Long-term growth hinges on its ability to capitalize on digital solutions and sustainable energy technologies.
Baker Hughes operates in a highly competitive landscape dominated by Schlumberger (now SLB), Halliburton, and TechnipFMC. Its competitive advantage lies in its integrated offerings across drilling, production, and digital solutions, which provide end-to-end capabilities for energy clients. The company's Turbomachinery & Process Solutions (TPS) segment differentiates it with specialized equipment for gas compression and power generation, a niche where it competes closely with Siemens Energy and GE Vernova. Baker Hughes' Digital Solutions (DS) segment leverages IIoT and AI-driven analytics, positioning it as a leader in smart energy infrastructure—a space where competitors like Schlumberger and Emerson Electric are also active. While Baker Hughes has a strong global footprint, it faces pricing pressure in commoditized services like drilling fluids and well completion, where Halliburton and Weatherford International are aggressive competitors. The company's focus on sustainability, including hydrogen and carbon capture technologies, could provide an edge as the industry shifts toward decarbonization. However, its reliance on offshore and subsea markets—where TechnipFMC and Subsea 7 dominate—exposes it to cyclical downturns in capital expenditure by oil majors.