Overview
BMO Capital has raised its price target for Baker Hughes (BKR) to $65.00 from $55.00, while maintaining an Outperform rating on the shares. The stock is trading at $56.29, slightly under its 52-week high of $56.89, and has returned 32.02% over the last 12 months.
Driver of the change
BMO tied the higher price target to a strong fourth-quarter 2025 performance from Baker Hughes’ Industrial & Energy Technology (IET) business and to management’s improved guidance for 2026. The bank highlighted margin expansion within IET as well as firm demand across the segment’s end markets, with notable exposure to power identified as a particular strength.
Revised estimates
Following the quarter, BMO adjusted several near- and full-year forecasts for Baker Hughes. The firm lifted its first-quarter 2026 earnings-per-share (EPS) estimate by 9.2% to $0.53 and raised its Q1 EBITDA projection by 5.7% to $1.07 billion. For the full year 2026, BMO increased its EPS estimate by 2.6% to $2.60 and its EBITDA estimate by 2.0% to $4.87 billion.
Looking further ahead, BMO’s model projects 2027 EPS of $2.94 and EBITDA of $5.29 billion for Baker Hughes, excluding GTLS in its estimates.
Valuation context
BMO observed that Baker Hughes’ shares currently trade at roughly 14 times 2026 EBITDA on the IET segment - a multiple the bank described as below peer group levels, which it characterized as typically residing in the high-teens to low-twenties range. Baker Hughes carries a market capitalization of $55.55 billion.
Quarterly results that influenced the outlook
Baker Hughes reported fourth-quarter 2025 results that topped consensus expectations. Adjusted EPS for the period came in at $0.78, ahead of a $0.67 projection. Revenue for the quarter was $7.39 billion versus an anticipated $7.07 billion. The company’s Q4 performance underpinned the positive reassessment by BMO and was singled out for margin gains and strong demand in IET end markets.
Market and analyst activity
While the company’s results drew a favorable market response, there were no material mergers or acquisitions announced for the period, and analyst coverage did not produce any notable upgrades or downgrades beyond the actions described by BMO.
Conclusion
BMO’s decision to increase the price target reflects a combination of better-than-expected IET results, stronger guidance for 2026, and upward revisions to near- and full-year earnings and EBITDA estimates. The bank’s view also highlights a relative valuation gap versus peers on an IET EBITDA multiple basis.