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Here's Why You Should Add Baker Hughes Stock to Your Portfolio Now
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Key Takeaways
Baker Hughes' IET bookings surged 79% to nearly $12 billion in the first half of 2026.
Baker Hughes' backlog reached a record $40.1 billion, with IET accounting for $37.1 billion.
BKR's adjusted EBITDA margin hit a record 18.3% in Q2 as free cash flow rose to $1.11 billion.
Baker Hughes Company (BKR - Free Report) is one of the world’s largest oilfield service providers. The company offers technologies and services across the energy and industrial value chain. Baker Hughes operates through its Oilfield Services & Equipment, and Industrial & Energy Technology (IET) businesses. Its oilfield portfolio supports onshore and offshore operations across drilling, completions, production and decommissioning. Baker Hughes provides gas technologies, LNG, industrial equipment, digital solutions and aftermarket services. The company operates in more than 120 countries and serves customers across energy and industrial markets. Its technologies are designed to improve efficiency, reliability and sustainability within customer operations.
Rising EPS Estimates Boost Earnings Confidence
The consensus estimates for BKR’s 2026 and 2027 earnings have risen 12.50% and 11.76%, respectively, over the past 60 days. These upward revisions reflect increasing analyst confidence in the company’s earnings growth potential.
Image Source: Zacks Investment Research
For the energy oilfield services sector, rising estimate trends for a major service provider like BKR can signal a supportive operating environment. It may reflect expectations for healthy upstream spending and sustained demand for oilfield equipment, technology and services. However, BKR’s revisions alone do not establish an improving earnings trend for the entire sector.
Why BKR Stock Looks Attractive
IET Growth Lifts Earnings Power: Baker Hughes’ IET business is showing strong growth momentum during the first half of 2026. In the first six months ended June 2026, IET revenues increased 7% year over year to $6.64 billion, while segment EBITDA climbed 25% to $1.36 billion. The improvement was driven by pricing, productivity, higher volumes, foreign exchange and cost-out initiatives. Gas Technology Services revenues increased to $1.62 billion from $1.34 billion, while Climate Technology Solutions revenues rose to $423 million from $334 million. IET’s continued expansion is improving BKR’s earnings mix and increasing its exposure to energy infrastructure and technology markets beyond traditional oilfield services.
Strong Order Momentum Supports Growth: BKR’s order intake is gaining significant momentum during the first half of 2026. In the first six months ended June 2026, total company orders reached $18.66 billion, up 38% from $13.49 billion a year earlier, while IET bookings surged 79% to nearly $12 billion. Gas Technology Equipment orders more than tripled to $6.74 billion and Gas Technology Services orders increased to $2.29 billion. IET orders also reached a record $7.1 billion in the second quarter, up from $4.9 billion in the first quarter. Based on this momentum, management raised full-year 2026 IET order guidance to $17.5-$19.5 billion and expects Horizon 2 orders to exceed $45 billion.
Record Backlog ImprovesRevenue Visibility: Strong bookings have translated into a record backlog. As of June 2026, BKR had remaining performance obligations of $40.1 billion, including $37.1 billion from IET. The second-quarter IET book-to-bill ratio reached 2.2, indicating that new orders continued to outpace recognized revenues. Management expects a meaningful share of Gas Technology Equipment orders to translate into revenues after 2027. This backlog provides greater visibility into future revenues while expanding BKR’s installed base for aftermarket, upgrades and digital services.
Margins & Cash Flow Keep Rising: Operating performance improved as the first half progressed. Adjusted EBITDA increased from $1.16 billion in the first quarter of 2026 to $1.23 billion in the second quarter, while adjusted EPS advanced from 58 cents to 64 cents. Adjusted EBITDA margin increased from 17.6% in the first quarter to a record 18.3% in the second quarter. Free cash flow showed an even larger sequential improvement, rising from $210 million to $1.11 billion as customer collections and working-capital performance strengthened. Management expects 2026 revenues of $27.35 billion and adjusted EBITDA of $4.85 billion, modestly above its previous expectations.
Power, LNG & Chart Expand GrowthOpportunities: The commercial mix became more favorable during the first six months as Baker Hughes captured rising investment in power and gas infrastructure. Second-quarter Power Systems orders reached $2.6 billion, including 2.7 gigawatts of generation capacity, while LNG equipment orders totaled $1.8 billion across three major projects. Management estimates expanded Power Systems capacity could support nearly $5 billion of annual revenues at full utilization by 2029 and sees an approximately $100 billion Power Systems addressable market by 2030. The July 2026 Chart acquisition further expands Baker Hughes into thermal management, air and gas handling, carbon capture and lifecycle services. Management identified almost 300 integration initiatives and targets $325 million of annualized cost synergies by year three, adding another avenue for margin and recurring-revenue growth.
Verdict for BKR Stock
Based solely on the favorable developments, BKR’s investment case has strengthened. The most important change is not simply higher quarterly earnings but accelerating IET orders, backlog expansion and improving earnings quality. IET bookings approached $12 billion in the first half, its EBITDA rose 25% year over year and the companywide adjusted EBITDA margin reached a record 18.3% in the second quarter. Cash generation also improved materially between the first and second quarters.
The order trajectory provides visibility beyond 2026, while power, LNG, aftermarket services and the Chart acquisition broaden the sources of future growth. Management’s decision to raise both full-year IET order guidance and the Horizon 2 order target reinforces that the improvement is being supported by a larger pipeline rather than one quarter of unusually favorable results. Therefore, this Zacks Rank #2 (Buy) stock looks attractive for investors seeking exposure to rising energy infrastructure, LNG and power investment with expanding earnings and cash-flow potential.
Drilling Tools manufactures and rents downhole tools used in oil and natural gas wells, giving it direct exposure to drilling activity. The Zacks Consensus Estimate for DTI’s 2026 earnings per share is pegged at 10 cents, suggesting year-over-year growth of 11.1%.
RPC’s range of completion and production services positions it to participate in higher oilfield activity when producers step up spending. Its offerings span pressure pumping, wireline, cementing and downhole tools, providing exposure across several stages of well development. The Zacks Consensus Estimate for RES’ 2026 earnings per share is pegged at 26 cents, suggesting year-over-year growth of 30%.
Oceaneering International provides engineered products, services and robotic solutions for offshore energy operations. In the second quarter of 2026, OII’s revenues increased 10% to $768 million and adjusted EBITDA rose 11% to $115 million. The Zacks Consensus Estimate for OII’s 2026 earnings per share is pegged at $2.1, suggesting year-over-year growth of 11.1%.
View the Zacks #1 Rank List
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Here's Why You Should Add Baker Hughes Stock to Your Portfolio Now
Key Takeaways
Baker Hughes Company (BKR - Free Report) is one of the world’s largest oilfield service providers. The company offers technologies and services across the energy and industrial value chain. Baker Hughes operates through its Oilfield Services & Equipment, and Industrial & Energy Technology (IET) businesses. Its oilfield portfolio supports onshore and offshore operations across drilling, completions, production and decommissioning. Baker Hughes provides gas technologies, LNG, industrial equipment, digital solutions and aftermarket services. The company operates in more than 120 countries and serves customers across energy and industrial markets. Its technologies are designed to improve efficiency, reliability and sustainability within customer operations.
Rising EPS Estimates Boost Earnings Confidence
The consensus estimates for BKR’s 2026 and 2027 earnings have risen 12.50% and 11.76%, respectively, over the past 60 days. These upward revisions reflect increasing analyst confidence in the company’s earnings growth potential.
For the energy oilfield services sector, rising estimate trends for a major service provider like BKR can signal a supportive operating environment. It may reflect expectations for healthy upstream spending and sustained demand for oilfield equipment, technology and services. However, BKR’s revisions alone do not establish an improving earnings trend for the entire sector.
Why BKR Stock Looks Attractive
IET Growth Lifts Earnings Power: Baker Hughes’ IET business is showing strong growth momentum during the first half of 2026. In the first six months ended June 2026, IET revenues increased 7% year over year to $6.64 billion, while segment EBITDA climbed 25% to $1.36 billion. The improvement was driven by pricing, productivity, higher volumes, foreign exchange and cost-out initiatives. Gas Technology Services revenues increased to $1.62 billion from $1.34 billion, while Climate Technology Solutions revenues rose to $423 million from $334 million. IET’s continued expansion is improving BKR’s earnings mix and increasing its exposure to energy infrastructure and technology markets beyond traditional oilfield services.
Strong Order Momentum Supports Growth: BKR’s order intake is gaining significant momentum during the first half of 2026. In the first six months ended June 2026, total company orders reached $18.66 billion, up 38% from $13.49 billion a year earlier, while IET bookings surged 79% to nearly $12 billion. Gas Technology Equipment orders more than tripled to $6.74 billion and Gas Technology Services orders increased to $2.29 billion. IET orders also reached a record $7.1 billion in the second quarter, up from $4.9 billion in the first quarter. Based on this momentum, management raised full-year 2026 IET order guidance to $17.5-$19.5 billion and expects Horizon 2 orders to exceed $45 billion.
Record Backlog Improves Revenue Visibility: Strong bookings have translated into a record backlog. As of June 2026, BKR had remaining performance obligations of $40.1 billion, including $37.1 billion from IET. The second-quarter IET book-to-bill ratio reached 2.2, indicating that new orders continued to outpace recognized revenues. Management expects a meaningful share of Gas Technology Equipment orders to translate into revenues after 2027. This backlog provides greater visibility into future revenues while expanding BKR’s installed base for aftermarket, upgrades and digital services.
Margins & Cash Flow Keep Rising: Operating performance improved as the first half progressed. Adjusted EBITDA increased from $1.16 billion in the first quarter of 2026 to $1.23 billion in the second quarter, while adjusted EPS advanced from 58 cents to 64 cents. Adjusted EBITDA margin increased from 17.6% in the first quarter to a record 18.3% in the second quarter. Free cash flow showed an even larger sequential improvement, rising from $210 million to $1.11 billion as customer collections and working-capital performance strengthened. Management expects 2026 revenues of $27.35 billion and adjusted EBITDA of $4.85 billion, modestly above its previous expectations.
Power, LNG & Chart Expand Growth Opportunities: The commercial mix became more favorable during the first six months as Baker Hughes captured rising investment in power and gas infrastructure. Second-quarter Power Systems orders reached $2.6 billion, including 2.7 gigawatts of generation capacity, while LNG equipment orders totaled $1.8 billion across three major projects. Management estimates expanded Power Systems capacity could support nearly $5 billion of annual revenues at full utilization by 2029 and sees an approximately $100 billion Power Systems addressable market by 2030. The July 2026 Chart acquisition further expands Baker Hughes into thermal management, air and gas handling, carbon capture and lifecycle services. Management identified almost 300 integration initiatives and targets $325 million of annualized cost synergies by year three, adding another avenue for margin and recurring-revenue growth.
Verdict for BKR Stock
Based solely on the favorable developments, BKR’s investment case has strengthened. The most important change is not simply higher quarterly earnings but accelerating IET orders, backlog expansion and improving earnings quality. IET bookings approached $12 billion in the first half, its EBITDA rose 25% year over year and the companywide adjusted EBITDA margin reached a record 18.3% in the second quarter. Cash generation also improved materially between the first and second quarters.
The order trajectory provides visibility beyond 2026, while power, LNG, aftermarket services and the Chart acquisition broaden the sources of future growth. Management’s decision to raise both full-year IET order guidance and the Horizon 2 order target reinforces that the improvement is being supported by a larger pipeline rather than one quarter of unusually favorable results. Therefore, this Zacks Rank #2 (Buy) stock looks attractive for investors seeking exposure to rising energy infrastructure, LNG and power investment with expanding earnings and cash-flow potential.
Other Key Picks
Other top-ranked energy tickers include Drilling Tools International Corporation (DTI - Free Report) , RPC, Inc. (RES - Free Report) and Oceaneering International, Inc. (OII - Free Report) . DTI currently sports a Zacks Rank #1 (Strong Buy), while RES and OII carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks Rank #1 stocks here.
Drilling Tools manufactures and rents downhole tools used in oil and natural gas wells, giving it direct exposure to drilling activity. The Zacks Consensus Estimate for DTI’s 2026 earnings per share is pegged at 10 cents, suggesting year-over-year growth of 11.1%.
RPC’s range of completion and production services positions it to participate in higher oilfield activity when producers step up spending. Its offerings span pressure pumping, wireline, cementing and downhole tools, providing exposure across several stages of well development. The Zacks Consensus Estimate for RES’ 2026 earnings per share is pegged at 26 cents, suggesting year-over-year growth of 30%.
Oceaneering International provides engineered products, services and robotic solutions for offshore energy operations. In the second quarter of 2026, OII’s revenues increased 10% to $768 million and adjusted EBITDA rose 11% to $115 million. The Zacks Consensus Estimate for OII’s 2026 earnings per share is pegged at $2.1, suggesting year-over-year growth of 11.1%.