BKR - Initiate at Outperform: Industrial Earnings, Services Multiple. Price Target $70

Research evidence excerpt

BKR - Initiate at Outperform: Industrial Earnings, Services Multiple. Price Target $70

July 8, 2026

Investment Conclusion

Company Description: Baker Hughes is the second largest US OFS company, and better defined as a global energy

technology company. It occupies a unique position among the OFS majors as the only company with material &

growing non-OFS revenue stream.

Acquisitions have redefined Baker Hughes' identity and competitive position book ended by the 2017 merger with

GE Oil & Gas, that transformed it from a pure OFS player into an energy technology company, underlined by the

pending $13.6bn acquisition of Chart Industries expected to close mid-year, subject to EU approval. By 2028, we

estimate non-OFS EBITDA will be >60% of the group.

YTD, BKR has underperformed the XLE by 3% but has continued to track OFS peers suggesting the market still

views the investment case as a cyclical OFS play. At current levels, BKR has a mkt cap of $52bn with $1.4bn of net

debt ($16bn total debt), pre-positioned for the Chart deal. Post close we see its capital structure closer to 75% equity /

25% net debt, turning management's priority for FcF turning to deleveraging.

We initiate coverage at Outperform and PT of $70/sh. We see the investment case anchored on continued

diversification from cyclical OFS revenues, noting that on completion of Chart, non-OFS revenue mix shifts towards

Industrial & Energy Technology (IET) for the first time, with tailwinds from synergies that is an additional tailwind for

relative performance vs more traditional OFS peers.

Exhibit 1 - Historical BKR NTM EV/EBITDA Exhibit 2 - Big Three Oil Field Services since 1.1.25

Source: Wolfe Research Source: Wolfe Research, FactSet

Exhibit 3 - PT wacc vs g sensitivity Exhibit 4 - Implied EV/EBITDA sens