Broker Recommendation 20230106: BKR

*One Stock Before the Bell*

*Baker Hughes Co (NASDAQ: BKR)*
$28.80 (-2.47% YTD)

Baker Hughes provides oilfield equipment and services. Oilfield Services (OFS) firms are relatively *less impacted by the daily gyrations of oil prices*. It also builds equipment for Liquefied Natural Gas (LNG) facilities. A recent survey by the *Federal Reserve Bank of Dallas showed that 60% of oil & gas companies plan to increase capital spending in 2023*. The spending of these firms serve as revenue for OFS companies like Baker Hughes.

BKR's *Q3 revenue and EPS* grew by 5.42% YoY and 62.50% respectively. *Recent restructuring efforts* are expected to improve productivity and cut annual costs by $150M*. LNG should be a major growth driver moving forward as *Europe looks to move away from reliance on Russian gas supply*. The stock looks undervalued at a *blended forward P/E ratio of 17.2x*, a *24% and 32% discount* to its 2Y and 5Y average P/E respectively.