Baker Hughes (BKR) is back on investors’ radar after repositioning itself as an energy technology company, with a record US$32b backlog and the planned Chart Industries acquisition drawing fresh attention.

The recent 15.8% 1 month share price return to US$51.75, alongside a 9.8% year to date share price gain and a 5 year total shareholder return of 165.3%, suggests momentum has been building as investors react to Baker Hughes' energy transition push, rig count data and the planned Chart Industries deal.

If Baker Hughes has you rethinking the future of energy and infrastructure, it could be a good moment to widen your search with aerospace and defense stocks as another source of ideas linked to global spending and long term projects.

With shares near US$51.75, a record US$32b backlog, and an estimated intrinsic value implying an 18% discount, the key question is whether Baker Hughes still trades below its fundamentals or if the market already reflects expectations for its future performance.

Most Popular Narrative: 2.6% Undervalued

With Baker Hughes last closing at US$51.75 against a narrative fair value of about US$53.14, the gap is small but still points to a modest discount that hinges on specific earnings, margin and multiple assumptions.

The company's strong momentum in securing large-scale service contracts, framework agreements, and technology-driven orders (such as for data centers, LNG, CCS, and recurring gas tech services) is driving an all-time high IET backlog, building strong visibility into future revenue and supporting sustained earnings durability.

Curious what justifies a premium future P/E, slower revenue growth and slightly lower margins, yet still supports this valuation gap? The full narrative lays out the earnings path, the cash flow implications and the key assumptions that connect today’s price to that fair value.

Result: Fair Value of $53.14 (UNDERVALUED)

However, you still need to weigh risks such as policy shifts that affect LNG and gas demand, as well as trade tariffs and supply chain costs that could pressure margins.

Build Your Own Baker Hughes Narrative

If you look at the numbers and reach a different conclusion, or simply prefer to test your own assumptions, you can build a complete view in just a few minutes with Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Baker Hughes.

Looking for more investment ideas?

If Baker Hughes has sharpened your thinking, do not stop here. Broaden your watchlist now so you are not left reacting to everyone else’s moves.

• Spot potential value opportunities early by checking out these 875 undervalued stocks based on cash flows that might align with your return expectations and risk tolerance.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.