- Price
- $55.70
- Fair value
- $73.00
- Discount
- 23.7%
- Uncertainty
- Medium
- LSEG rating
- 1.96
- Moat
- None
- Next earnings
- 2026-10-27
- Next earnings is estimate
- No
- Company name
- Baker Hughes
- Sector
- Energy & industrial equipment and services
- About
- Baker Hughes sells equipment and services to energy and industrial companies. Its Industrial & Energy Technology (IET) segment makes gas turbines, compressors, LNG equipment and power generation systems, and it serves LNG plants, pipelines, data centers and industry. Its Oilfield Services & Equipment (OFSE) segment provides drilling, well and production services and subsea equipment to oil and gas producers. On July 16, 2026, it bought Chart Industries, a maker of air and gas handling and thermal management equipment, which is now a third segment. Revenue was $6.7 billion in Q2 2026, and remaining performance obligations were $40.1 billion.
- Thesis
- The market prices Baker Hughes for weaker oilfield services and for the debt from the Chart purchase. OFSE revenue fell 5% from a year earlier in Q2 2026, mainly because of a business sale and disruptions in the Middle East. Baker Hughes paid $210 per share in cash for Chart, with new notes and term loans, so debt and integration risk are higher. For the gap to close, three things must be true. IET must turn its record backlog into revenue and margin, as orders for power generation and LNG equipment stay strong. IET orders were a record $7.1 billion in Q2 2026, and the company raised its outlook for IET orders in 2026 to 2028 to more than $45 billion. Chart must deliver the planned $325 million of annual cost synergies by the third year. Cash flow and the sale of Waygate Technologies for about $1.45 billion must bring net leverage to the target of 1.0 to 1.5 times within 24 months of the Chart close. The Q3 2026 report on October 27, 2026 is the first with Chart. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is a fall in oil and gas spending, which lowers OFSE results.
- Risks
- OFSE depends on oil and gas drilling and production spending. Lower oil prices or conflict in the Middle East can reduce activity. Disruptions in the Middle East reduced OFSE revenue in Q2 2026.
The Chart purchase added debt and integration work. If the $325 million of cost synergies come late, or Chart's markets slow, debt falls more slowly than planned.
IET's growth depends on large LNG and power projects. If customers delay or cancel projects, orders and backlog can fall.
The sale of Waygate Technologies needs closing conditions. If it does not close, Baker Hughes has less cash to pay down debt.
- Balance sheet
- Cash: $15.7B
Debt: $16.3B
Net debt: $526M
Debt due within 12 months: $774M
Baker Hughes raised debt for the Chart purchase before it closed. At June 30, 2026, short-term debt was $774 million and long-term debt was $15.48 billion, so total debt was $16.25 billion, up from $6.09 billion at December 31, 2025. Cash was $15.73 billion, because most of the money for Chart was still in hand. On July 16, 2026, Baker Hughes paid for Chart with this cash and with new two-year term loans, so net debt is now much higher. The company targets net leverage of 1.0 to 1.5 times within 24 months, helped by free cash flow, which was $1,109 million in Q2 2026, and by the sale of Waygate Technologies for about $1.45 billion. Adjusted EBITDA was $1,231 million in Q2 2026.
As of 2026-06-30.
- Checkpoints
- Oct 27, 2026: Q3 2026 earnings: first quarter with Chart. Pending. Watch: Strong IET orders, stable OFSE margins and a clear plan for Chart synergies and debt reduction pass; weak orders or a cut in guidance fail.
Q3 2027 (estimate): Net leverage falls toward the target. Pending. Watch: Net leverage clearly falling toward 1.0 to 1.5 times by mid-2027, with the Waygate sale closed, passes; flat or rising leverage fails.
- Recent events
- 2026-09-28: Baker Hughes said it will release its Q3 2026 results on October 27, 2026, after the market closes, and hold its call on October 28, 2026.
2026-07-26: Baker Hughes reported Q2 2026 results. Orders were $10.5 billion, including record IET orders of $7.1 billion, and remaining performance obligations were $40.1 billion. Revenue was $6.7 billion, adjusted EBITDA was $1,231 million and free cash flow was $1,109 million. GAAP diluted EPS was $0.68 and adjusted EPS was $0.64. The company announced the sale of Waygate Technologies to Hexagon for about $1.45 billion in cash.
2026-07-26: IET received a major Venture Global award for six LNG blocks, awards from Cheniere and Bechtel for Sabine Pass Train 7, and orders for gas turbines from Dynamis Power Solutions and Kodiak Gas Services for power at data centers and energy sites.
2026-07-16: Baker Hughes completed the purchase of Chart Industries for $210 per share in cash. It paid with cash on hand, the $6.5 billion and EUR 3.0 billion of notes issued on March 11, 2026, and new two-year term loans. It expects $325 million of annual cost synergies by the third year and targets net leverage of 1.0 to 1.5 times within 24 months.