In a recent transaction, Lorenzo Simonelli, the Chairman, President, and CEO of Baker Hughes Co (NYSE:BKR), has sold a significant portion of his stock in the company. The transaction, which took place on August 8, 2024, involved the sale of 114,286 shares at a price of $35.0 per share, resulting in a total value of $4,000,010.
The sale was conducted under a Rule 10b5-1 trading plan, which was adopted by Simonelli on February 8, 2024. This plan allows corporate insiders to set up a predetermined schedule to sell stocks at a time when they are not in possession of material non-public information, providing a defense against claims of insider trading.
Following the sale, Simonelli still retains a substantial stake in the company, with 502,053 shares of Baker Hughes Co's Class A Common Stock remaining in his possession. This indicates a continued vested interest in the company's performance and alignment with shareholder values.
Baker Hughes, headquartered in Houston, Texas, operates in the oil and gas filed machinery & equipment sector and is incorporated in Delaware. The company's stock is listed on the New York Stock Exchange under the ticker symbol BKR.
The transaction comes at a time when investors are keenly observing the movements of company executives, as their buying and selling activities are often considered indicators of the company's financial health and future prospects.
For more detailed information, investors are encouraged to review the full SEC Form 4 filing.
In other recent news, Baker Hughes has been the subject of significant attention from various financial firms due to its robust second-quarter financial performance and margin expansion. Benchmark has raised its price target for the company to $42.00, reflecting Baker Hughes' anticipated growth and improved margins. Similarly, BofA Securities, Goldman Sachs, JPMorgan, and Citi have increased their price targets to $43, $43, $43, and $44 respectively, acknowledging the company's strong operational efficiency and exceptional quarterly results.
Baker Hughes is projected to achieve an OFSE EBITDA margin of 19% by the fourth quarter of 2024, suggesting the company's goal of a 20% margin in 2025 is attainable. Over 75% of the company's revenue comes from international operations, contributing to a more predictable revenue stream and higher margins. Moreover, the company has increased its quarterly cash dividend to $0.21 per share, up by 5% from the same quarter of the previous year.
The company's recent developments include securing approximately $6.4 billion in IET orders in the first half of 2024, keeping it on track to meet its full-year inbound IET order target. The company also reported strong New Energy orders totaling $445 million in the second quarter, with year-to-date orders reaching $684 million. Analysts from Goldman Sachs, JPMorgan, and Citi have noted Baker Hughes' strong order performance and operational efficiency.
However, BofA Securities has lowered its price target from $40.00 to $38.00, reflecting potential disruptions due to the energy transition. Despite potential industry disruptions, Baker Hughes remains confident in its growth prospects, exploring the implementation of microgrid solutions in the Permian Basin to lower emissions and enhance power reliability for oil and gas operators.
InvestingPro Insights
As Baker Hughes Co (NYSE:BKR) faces scrutiny following the Chairman, President, and CEO's recent stock sale, investors are looking for indicators that might provide insight into the company's financial health and future prospects. According to InvestingPro data, Baker Hughes boasts a market capitalization of $34.84 billion, reflecting its significant presence in the oil and gas field machinery & equipment sector. The company's P/E ratio stands at 19.66, suggesting that the stock is trading at a multiple that is attractive relative to its earnings. Moreover, with a PEG ratio of 0.24 for the last twelve months as of Q2 2024, the stock appears to offer growth at a reasonable price.
Adding to the positive sentiment, an InvestingPro Tip highlights that 17 analysts have revised their earnings upwards for the upcoming period, indicating a potential improvement in the company's financial performance. Additionally, Baker Hughes has been noted for its low price volatility, which could be a reassuring factor for investors seeking stability in their portfolios. The company has not only maintained dividend payments for 38 consecutive years but also experienced a dividend growth of 10.53% in the last twelve months as of Q2 2024, signaling a commitment to returning value to shareholders.
For investors interested in a deeper analysis, there are additional InvestingPro Tips available, providing further insights into Baker Hughes' financial metrics and investment potential. To explore these insights, visit the dedicated InvestingPro page for Baker Hughes at https://www.investing.com/pro/BKR.
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