UBS Holds Neutral on Baker Hughes (BKR) After $1.15B Deal With Crane

Baker Hughes Company (NASDAQ:BKR) is one of the 10 most undervalued oil stocks to buy according to analysts. Analyst firm UBS maintained its rating of Baker Hughes Company (NASDAQ:BKR) at Neutral on June 10 and set a stable price target of $40 on the company’s shares. The update followed Baker Hughes’ announcement that it was selling its PSI product line to Crane Company for $1.15 billion.

The deal, going for a price much higher than Baker Hughes’ current EV/EBITDA multiple, is viewed as a strategic move for the company. Baker Hughes views the deal as a strategic decision because it was sold for a price far greater than its current EV/EBITDA multiple. It is expected that the deal will help Baker Hughes raise its profit margins, which will help it achieve its goal of an EBITDA margin of 20%.

Crane Company, a diverse manufacturer of designed industrial goods, has purchased the PSI product line, which deals with pressure pumping systems. The sale is a component of Baker Hughes’ ongoing endeavors to optimize its operations and concentrate on more lucrative areas.

Baker Hughes Company (NASDAQ:BKR), one of the biggest oil field services, industrial, and energy technology firms in the world, offers goods and services to the oil and gas sector for exploration and production as well as other industrial and energy applications.

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