Strong Q1 Performance#
Stifel has reaffirmed its Buy rating and $63.00 price target for Baker Hughes (NASDAQ:BKR) following the company's impressive first-quarter results for 2026. Baker Hughes reported an adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) that was 11.9% higher than Stifel's expectations and 9.2% above the company's own guidance midpoint. This strong performance comes despite challenges in the Middle East region.
Revenue and Margins Exceed Expectations#
Baker Hughes exceeded revenue and profit margin expectations in both its Oilfield Service & Equipment and Industrial Energy Technology segments. The company also noted a strong flow of orders during the quarter, indicating healthy demand for its services and products.
Guidance and Spending Plans#
The company has maintained its full-year EBITDA guidance and order flow expectations for 2026. Notably, Baker Hughes has adjusted its spending plans for upstream activities in North America and other international markets (excluding the Middle East) to be relatively flat compared to last year, rather than the previously expected declines.
Recent Developments#
In addition to its quarterly results, Baker Hughes announced a cash dividend of $0.23 per share for Class A common stock, which will be paid on May 15, 2026, to shareholders on record as of May 5, 2026. The company plans to fund this dividend from its operational cash flow. Furthermore, Baker Hughes has agreed to sell its Waygate Technologies business to Hexagon for approximately $1.45 billion, which includes various inspection and imaging solutions.
Additionally, the U.S. oil and gas rig count has decreased for the second week in a row, dropping by two to 543, the lowest level since late March and a 7% decline from the same time last year. Despite lowering its earnings estimates for 2026 due to disruptions in the Middle East, Stifel continues to maintain a positive outlook on Baker Hughes.