BKR
Baker Hughes Company
$66.06
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Overvalued
Trading 51.2% above fair value
You pay
$66.06
Bear
$24.79
Fair
$43.69
Bull
$67.45
Bear
$24.79
-62.5%
FCF $1966M × 10x
Fair
$43.69
-33.9%
FCF $2537M × 13x
Bull
$67.45
+2.1%
FCF $3108M × 16x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
26.7x
Summary
Our base-case estimate uses a valuation based on free cash flow under different commodity price assumptions and a valuation multiple. We then blend that result with the average analyst price target of $73.20 from 45 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $43.69 per share.
Warnings
If oil drops to $60/barrel, the stock could fall -73%. Check whether the company can survive at low prices and still pay its dividend.
Where you think oil prices will settle long-term drives over 80% of this valuation. The biggest risk isn't the company itself — it's getting the commodity price wrong.
Wall Street's average price target is $73.20 (from 45 analysts). Our estimate is 58% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — commodity volumes do not compound
- Geopolitical premiums are real but historically temporary
- Reserve replacement ratio below 100% for 3 years is existential