Back to top

Bear of the Day

We are downgrading our recommendation for Baker Hughes, Inc. (BHI) to Underperform from Neutral following its first quarter 2012 results. Baker Hughes earnings declined in the first quarter mainly due to the lower margins in North America and pricing constraints in the pressure pumping sector.

We remain cautious about the pricing pressures, supply chain and raw material constraints in its pricing pressure business in North America, and thus prefer to stay on the sidelines. Although activity is expected to climb in 2012, we remain apprehensive for the geo-political issues that may affect the operations in certain areas.

Hence our downgrade on the stock. Our $40 price objective is based on the 2012 P/E multiple of 10.8x. Our target multiples are well within the historical trading range for the stock.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%