Baker Hughes has dropped another 5.4% this week to $55.50, extending a painful month that has now erased 13% — and the C-suite selling flagged in last week's note looks increasingly well-timed.
The insider angle has developed since the June 24 article. CEO Lorenzo Simonelli sold a further 181,411 shares on June 22 at $58.43, adding roughly $10.6 million to the disposal pile. Combined with his June 12 sale at $63.36 and the CFO's mid-month transactions, net insider activity over the past 90 days now totals approximately $25 million in sales. Every one of those trades happened above the current $55.50 price. The Chief Accounting Officer sold twice in early June as well. This is not one executive trimming for personal reasons — it is a broad C-suite exit into what proved to be a declining market.
The positioning picture has shifted materially since last week's note, and the shift is notable. Short interest has fallen sharply — down 31% on the week to just 2% of the free float — reversing the build-up that had run from late May into mid-June. That unwinding came fast: short interest peaked near 3.2% of float around June 10-12 and has now halved. The borrow market remains exceptionally loose, with availability at roughly 5,400% — more than 838 million shares available to lend against a short position of under 20 million — so there is no squeeze dynamic at work. Cost to borrow is negligible at 0.36%. The short score has fallen from the mid-35s to 31.7, consistent with the short interest unwind. This is not a story of bears pressing the stock lower; shorts are actually covering into the weakness.
Options positioning has normalized from the extreme call-heavy skew reported last week. The put/call ratio has moved back up to 0.79, essentially in line with its 20-day average of 0.79, with a z-score near zero. The spike of optimism visible in the prior note — when the PCR had dropped to 0.71 and nearly three standard deviations below average — has faded. Options traders are no longer leaning aggressively toward upside. That said, the PCR is far from defensive territory; the 52-week high was 1.18, and the current reading is nowhere near it.
The Street remains constructive in aggregate, but targets are drifting lower as the price falls. The mean price target is $71.14, implying roughly 28% upside from current levels. The most recent analyst action was Citigroup's Scott Gruber cutting his target from $80 to $74 on June 3 while maintaining a Buy — still well above the market price but acknowledging the macro pressure. Before that, a broad post-Q1 earnings target upgrade cluster in late April lifted targets across JPMorgan (to $74), Citi (to $80), TD Cowen (to $75), and BMO (to $80). Barclays subsequently downgraded to Equal-Weight in May, raising its target to $74 from $62 in the same move — an unusual combination that signals diminished conviction rather than outright bearishness. The valuation has de-rated alongside the price: the PE multiple has compressed roughly 4.3 turns over the past 30 days to around 22x, and EV/EBITDA has pulled back to 11.6x. The bear case — OPEC+ oversupply, tariff headwinds, and flat 2026 margin guidance — is increasingly visible in the tape. Peers offer mixed context: WFRD is down 8.8% on the week, worse than BKR, while FTI has held flat and XPRO has jumped over 10%, suggesting the sector is fragmenting rather than moving as one.
Q2 earnings on July 21 are the next major event. The last two prints produced day-one moves of +0.9% and +6%, respectively, so the market has rewarded recent results — but those reports were filed from a higher price base, and the question now is whether guidance commentary on LNG project timelines and international drilling activity can arrest a slide that insiders, at least, appeared to see coming.
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