J.P. Morgan analyst Arun Jayaram maintained a Buy rating on Baker Hughes Company (BKR – Research Report) today and set a price target of $48.00.
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Arun Jayaram’s rating is based on several strategic and market factors that favor Baker Hughes Company. The CEO, Lorenzo Simonelli, has expressed optimism about the global investment trends for natural gas, which is increasingly in demand for LNG, gas infrastructure, and power generation. This trend, described as the ‘age of gas,’ positions Baker Hughes to benefit significantly from the rising market demand. Additionally, the company’s Gas Tech Equipment division is expected to see substantial growth, with a projected total addressable market of $100 to $120 billion by 2030.
Furthermore, the company’s new CFO, Ahmed Moghal, has outlined strategic priorities that include improving working capital management and reducing the cash tax burden, which could enhance financial performance. Baker Hughes is also considering portfolio optimization by divesting non-core, cyclical product lines and reinvesting in more stable, industrial-like businesses. This strategic shift, coupled with the company’s strong balance sheet and potential for margin improvement in the IET division, supports a positive outlook for durable earnings and cash flow, justifying the Buy rating.
According to TipRanks, Jayaram is a 5-star analyst with an average return of 8.2% and a 53.89% success rate. Jayaram covers the Energy sector, focusing on stocks such as Diamondback, Coterra Energy, and Devon Energy.
In another report released yesterday, Stifel Nicolaus also maintained a Buy rating on the stock with a $50.00 price target.