Impressive Horizon with Record Order Book, Power Capacity Expansion

Research evidence excerpt

Impressive Horizon with Record Order Book, Power Capacity Expansion

Barclays | Baker Hughes Company

The capacity expansion translates order strength into a quantified revenue opportunity.

With Power Systems demand outrunning available slots, BKR is building out capacity to meet

2028-2030 growth. The expansion will result in $5bn of annual Power Systems revenue at full

utilization by 2029, a 3-4x increase from roughly $1bn in 2025, with gas turbines about half the

mix and BRUSH generators roughly a quarter. He stressed the math rests on 2025 average

pricing rather than today's tighter market, with paybacks below two years and spend phased

over 2026-2028. The first incremental NovaLT capacity arrives in 1H27, and gas turbine capacity

doubles from 2026 levels by YE28.

Chart closes as a third segment, with the synergy case reiterated and potential data center

opportunities. The July 16 close puts execution into focus as Mr. Simonelli detailed ~300

initiatives behind the $325mm year three cost synergy target across 18 work streams. Data

centers are a potential commercial opportunity with BKR power generation paired with Chart

thermal management and cooling, along with gas infrastructure, space, geothermal and mining

as adjacencies. The ~$1.45bn Waygate sale to Hexagon continues the portfolio reshaping, and

Mr. Moghal committed to 1.0-1.5x net leverage within 24 months post close. We will be watching

whether early synergy capture tracks ahead of the year one $95mm when the combined guide

lands.

OFSE outperformed on execution and mix led by LatAm and SSPS. Revenue of $3,451mm

rose 7% q/q and EBITDA of $605mm exceeded the high end of guidance, with margin up 10bps

despite inflationary costs. Three drivers behind the outperformance: international (ex Middle