HomeBusinessThis oil stock is breaking out from the buy point as the...

This oil stock is breaking out from the buy point as the oil price hits the 2023 high

Drilling services company and top oil share Baker Hughes (BKR) rose above a new buying point on Friday after tight trading in recent weeks. Tight trading, as seen on BKR’s chart, can indicate strong demand and be a bullish indicator.

Shares of Baker Hughes have held support around their 200-day mark in recent months. The stock gained momentum in June and July, rising 16% and about 13% respectively.

Energy stocks led the market in 2022 during the Russian invasion of Ukraine, which had a huge effect on energy markets. But in 2023, most energy stocks and oil prices lagged as global markets returned to normal. However, over the past six weeks, oil prices have risen above the psychologically important level of $80 a barrel. On Friday, West Texas Intermediate futures traded at about $85 a barrel, reaching a 2023 high.

This has helped many oil stocks, including Baker Hughes. Shares of BKR were up about 2% on Friday, above a recent tight four-week buy point of 36.48. The stock also moved above an early entry at 35.62 this week.

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Oil stocks Baker Hughes shows accelerating earnings per share and revenue growth

The Houston-based company provides drilling services and equipment for oil and natural gas producers. Baker Hughes also provides services to liquefied natural gas producers through its fast-growing industrial and energy technology segment. Oilfield equipment and services account for approximately 60% of sales.

Over the past three quarters, Baker Hughes has delivered accelerating annualized earnings per share of 52%, 87% and 255%. Meanwhile, sales growth accelerated from 8% to 18% to 25% in the same period.

Baker Hughes’ annual profit rose 2,066% in 2021 and another 41% in 2022. This year, Baker Hughes’ earnings per share are expected to grow 68% to $1.54 per share, according to FactSet estimates.

The company maintains a constructive outlook for global spending for the remainder of the year, expecting any weakness in North America to be “more than offset” by strength in international and offshore markets.

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According to IBD Stock Checkup, BKR stock ranks second in the oil and gas industry, making it a top oil stock to watch. The group itself ranks 30th out of 197 IBD groups.

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