BKR
Baker Hughes Company
$56.08
Oil & Gas E&P
85%
FCF at Price Deck × Multiple
Strong
·
Conviction
Overvalued
Trading 66.5% above fair value
You pay
$56.08
Bear
$19.18
Fair
$33.67
Bull
$51.89
Bear
$19.18
-65.8%
FCF $2123M × 10x
Fair
$33.67
-40.0%
FCF $2739M × 13x
Bull
$51.89
-7.5%
FCF $3356M × 16x
Adjust Assumptions
75.0$/bbl
13.0x
Key Value Driver
Oil price assumption ($75/bbl base case)
Implied Market Multiple
21.1x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (45 analysts)
$73.67
Divergence from AlphaVal
54%
Summary
At $75/bbl oil with a 13x EV/FCF multiple, intrinsic value is $33.67 per share. Range: $19.18 (bear) to $51.89 (bull).
Warnings
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 $73.67 (from 45 analysts). Our estimate is 54% 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