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Baker Hughes Company (BKR) Soars to 52-Week High, Time to Cash Out?
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Have you been paying attention to shares of Baker Hughes (BKR - Free Report) ? Shares have been on the move with the stock up 10.2% over the past month. The stock hit a new 52-week high of $38.67 in the previous session. Baker Hughes has gained 11.9% since the start of the year compared to the 5.7% move for the Zacks Oils-Energy sector and the 3.3% return for the Zacks Oil and Gas - Field Services industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 25, 2024, Baker Hughes reported EPS of $0.57 versus consensus estimate of $0.49.
For the current fiscal year, Baker Hughes is expected to post earnings of $2.19 per share on $27.82 billion in revenues. This represents a 36.88% change in EPS on a 9.06% change in revenues. For the next fiscal year, the company is expected to earn $2.62 per share on $29.15 billion in revenues. This represents a year-over-year change of 19.84% and 4.8%, respectively.
Valuation Metrics
Baker Hughes may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Baker Hughes has a Value Score of B. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 17.5X current fiscal year EPS estimates, which is not in-line with the peer industry average of 19.7X. On a trailing cash flow basis, the stock currently trades at 14.1X versus its peer group's average of 7.6X. Additionally, the stock has a PEG ratio of 0.62. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Baker Hughes currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Baker Hughes fits the bill. Thus, it seems as though Baker Hughes shares could have potential in the weeks and months to come.
How Does BKR Stack Up to the Competition?
Shares of BKR have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is TechnipFMC plc (FTI - Free Report) . FTI has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of B.
Earnings were strong last quarter. TechnipFMC plc beat our consensus estimate by 38.71%, and for the current fiscal year, FTI is expected to post earnings of $1.21 per share on revenue of $9 billion.
Shares of TechnipFMC plc have gained 10.8% over the past month, and currently trade at a forward P/E of 24.02X and a P/CF of 21.81X.
The Oil and Gas - Field Services industry may rank in the bottom 86% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for BKR and FTI, even beyond their own solid fundamental situation.
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Baker Hughes Company (BKR) Soars to 52-Week High, Time to Cash Out?
Have you been paying attention to shares of Baker Hughes (BKR - Free Report) ? Shares have been on the move with the stock up 10.2% over the past month. The stock hit a new 52-week high of $38.67 in the previous session. Baker Hughes has gained 11.9% since the start of the year compared to the 5.7% move for the Zacks Oils-Energy sector and the 3.3% return for the Zacks Oil and Gas - Field Services industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 25, 2024, Baker Hughes reported EPS of $0.57 versus consensus estimate of $0.49.
For the current fiscal year, Baker Hughes is expected to post earnings of $2.19 per share on $27.82 billion in revenues. This represents a 36.88% change in EPS on a 9.06% change in revenues. For the next fiscal year, the company is expected to earn $2.62 per share on $29.15 billion in revenues. This represents a year-over-year change of 19.84% and 4.8%, respectively.
Valuation Metrics
Baker Hughes may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Baker Hughes has a Value Score of B. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 17.5X current fiscal year EPS estimates, which is not in-line with the peer industry average of 19.7X. On a trailing cash flow basis, the stock currently trades at 14.1X versus its peer group's average of 7.6X. Additionally, the stock has a PEG ratio of 0.62. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Baker Hughes currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Baker Hughes fits the bill. Thus, it seems as though Baker Hughes shares could have potential in the weeks and months to come.
How Does BKR Stack Up to the Competition?
Shares of BKR have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is TechnipFMC plc (FTI - Free Report) . FTI has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of B.
Earnings were strong last quarter. TechnipFMC plc beat our consensus estimate by 38.71%, and for the current fiscal year, FTI is expected to post earnings of $1.21 per share on revenue of $9 billion.
Shares of TechnipFMC plc have gained 10.8% over the past month, and currently trade at a forward P/E of 24.02X and a P/CF of 21.81X.
The Oil and Gas - Field Services industry may rank in the bottom 86% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for BKR and FTI, even beyond their own solid fundamental situation.