NEW YORK (TheStreet) -- Jefferies increased its price target on Baker Hughes (BHI - Get Report) to $87, increased its estimates and set a "buy" rating. The firm said the company's product portfolio should be less vulnerable to cyclical downturn.
The stock closed at $72.54 on Thursday.
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- Despite its growing revenue, the company underperformed as compared with the industry average of 10.9%. Since the same quarter one year prior, revenues slightly increased by 9.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- BHI's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.43, which illustrates the ability to avoid short-term cash problems.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 50.47% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- BAKER HUGHES INC has improved earnings per share by 23.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BAKER HUGHES INC reported lower earnings of $2.47 versus $2.98 in the prior year. This year, the market expects an improvement in earnings ($4.17 versus $2.47).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Energy Equipment & Services industry average, but is greater than that of the S&P 500. The net income increased by 22.8% when compared to the same quarter one year prior, going from $267.00 million to $328.00 million.
- You can view the full analysis from the report here: BHI Ratings Report