Should I Buy Baker Hughes (BKR)? Finance YouTuber Analysis

The YouTuber suggests Baker Hughes as an undervalued opportunity, noting that while it's often seen as an oil and gas company, its aero-derivative gas turbines are ideal for data centers needing quick power. The company booked $1 billion in data center power orders in a single quarter and is expanding into cooling solutions, yet its stock remains cheap due to market mispricing, offering significant upside.

“Wall Street still thinks of it as an oil services company. It is the cheapest and the least noticed name on the list, even as its power business quietly has been taking off.”

Baker Hughes, an oil equipment and services company, is expected to secure contracts for upgrading Venezuelan oil fields. Investors are advised to wait for a price dip after the recent rally, considering the current oversupply and low prices in the oil market.

“Here we're looking at companies like Hallebertton ticker H, Schlumbumber, ticker SLB, and Baker Hughes ticker BKR. These are the major companies providing those drilling services to the major oil companies like Chevron, like Exxon. So basically they'll be contracted to provide the equipment, provide the services to go down there and upgrade some of these oil fields. What I would say though, I would wait for some of these to come back down.”

The analyst recommends Baker Hughes, an oil services company, expecting it to perform well as the energy industry recovers. He believes that upside in oil stocks will first be seen in these service companies as they are contracted for new wells and services.

“I think the Baker Hughes is going to do very well. I think this is where you're going to see a lot of the the upside in oil stocks and in energy companies hit first is in these oil services companies because they're going to be contracted to dig those new wells and to really provide those services as the as the industry comes back up.”

The analyst suggests Baker Hughes will benefit from the US-EU energy deal due to increased demand for equipment and services in the energy infrastructure buildout. The company's Industrial and Energy Technology segment has a record backlog, and its acquisition of Chart Industries expands its capabilities in cryogenics and heat transfer, critical for LNG and other energy projects. Any growth from these areas, which are not fully priced in, could lead to significant upside.

“Equipment and service companies like Baker Hughes and Chart Industries are poised for massive tailwinds from that US EU energy deal as exports surge to meet European demand.”

The YouTuber suggests Baker Hughes as a buy within the energy sector, which he identifies as trading at a discount to its long-term valuation and having an 18% upside to analyst price targets.

“In energy stocks, I like Devon Energy, Baker Hughes, Chevron, and Kinder Morgan.”

The YouTuber suggests watching Baker Hughes, a drilling services company, as a beneficiary of the new budget bill. The bill provides easier access for oil and gas companies to drill on federal land and offers lower royalty rates and better deductibility of costs.

“So, be watching names like Chevron, CVX, and especially drilling services like Schlumbumber, ticker SLB, and Baker Hughes, ticker BKR.”