Baker Hughes Company
Baker Hughes makes and services the turbines and compressors inside LNG export plants, pipelines and on-site power stations, and supplies tools and crews to oil and gas wells.
Our viewNeutral Medium conviction
The scores
The profile · 1-4
Growth2/4 ↑
Revenue was $27.83B in 2024 and $27.73B in 2025 and fell in Q2 2026; record orders mostly reach revenue after 2027.
Business quality3/4 →
Installed-base service holds $16.7B of obligations and a customer reserves its capacity, but core engines are licensed from GE Vernova, a rival.
Financial position3/4 ↓
Net debt of roughly $14B, about 2.5 times EBITDA after Chart, but maturities are spread to 2056 and cash flow covers interest.
Execution record3/4 →
Eight straight earnings beats and orders above guidance, but Chart was guided below its 2025 margin two months after closing.
Per share capture3/4 →
Chart was paid in cash and shares rose only 0.5% in six months, but buybacks stopped and interest will absorb early gains.
Potential3/4 ↑
A $37.1B backlog is mostly signed and IEA-measured LNG sanctions are real, but Power Systems' tripling rests on capacity not yet built.
Risk profile3/4 →
No customer above 10%, but core turbines depend on GE Vernova agreements of undisclosed term, and 10% of receivables sit in the UAE.
Valuation3/4 →
About 12.7 times pro forma EBITDA prices IET margins rising and Chart recovering as described; it does not pay for Power Systems tripling.
Evidence quality3/4 →
Central facts are filed or from the IEA and EIA, but Power Systems figures, backlog pricing and the post-Chart debt are management claims or estimates.
The bet · 2-3 years
Safe, little upside0.9×
If it works 0.9× · if it fails you keep about 82%.
The Verdict
We rate Baker Hughes neutral. It makes and services the machines inside gas export plants and pipelines, work that runs for decades once installed, and supplies tools and crews to oil and gas wells, so the business is solid. Equipment orders hit a record, but sales have been flat for two years and Chart, the company it borrowed heavily to buy, now earns less than when it was bought. The price is fair if margins rise and Chart recovers, with no cushion otherwise. As a bet on its turbines for data centres it is safe but has little upside: success adds little, and failure costs about a fifth.
The long caseData centres cannot wait years for the grid, so small gas turbines that arrive quickly and run on site could keep selling for years.
The evidence under this - 8 claims
C03facthigh confidence
IET booked a record $7.09B of orders in Q2 2026, double Q2 2025, a book-to-bill of 2.2; IET's remaining performance obligations reached $37.1B at June 30, 2026, up 19% on a year earlier - $15.0B of Gas Technology Equipment and $16.7B of Gas Technology Services. RPO excludes orders a customer can cancel without a substantive penalty.
sourceBaker Hughes second-quarter 2026 results release (8-K Ex-99.1)primaryBaker Hughes Company Form 10-K for the fiscal year ended…primary
- 2026-10-28editedMade historical: Q3 2026 orders and remaining obligations replace it as the current figures (C55)
C02facthigh confidence
Total revenue has not grown for two years: $27.83B in 2024, $27.73B in 2025, and $6.74B in Q2 2026, down 2% on Q2 2025, which the company attributes mainly to selling its sensors business (PSI) and putting surface pressure control (SPC) into a joint venture. OFSE revenue fell 8% in 2025 while IET rose 10%.
C14estimatemedium confidence
After paying about $13.6B for Chart and drawing $2.0B of term loans, net debt is roughly $14B - about 2.5 times a pro forma 2026 adjusted EBITDA of roughly $5.6B, against 0.1 times at June 30.
derivedJune 30 net debt of $0.53B (C13) plus the $13.6B enterprise value paid (C09), less Chart's own cash; the EBITDA is the stand-alone 2026 guide of about $4.85B plus Chart's second-half guide of $350M (C12) annualised to about $0.76B.
against this
- The Waygate sale for about $1.45B, expected at year-end, would cut net debt by roughly a tenth on its own (C15).
- Chart's cash and the exact refinancing of its $3.57B of debt are not yet filed, so the figure could be several hundred million either way until the Q3 2026 10-Q.
C12management claimmedium confidence
Baker Hughes guides Chart to $2.05B of revenue and $350M of EBITDA from July 16 to year-end 2026, about 17%, with 55% to 65% weighted to the fourth quarter, citing LNG project timing, soft hydrogen demand and first-of-a-kind project margins; it targets a Chart EBITDA margin of 22% to 23% in the second half of 2028 and $325M of annualised cost savings by year three ($95M in year one), with $35M executed by September 9.
sourceBaker Hughes presentation at the Barclays Energy-Power…primaryBaker Hughes second-quarter 2026 earnings call, prepared…primaryBaker Hughes Completes Acquisition of Chart Industries (8-K…primaryBaker Hughes Announces Third-Quarter 2026 Results, Form 8-K…primaryQ3 2026 earnings call transcript (FMP), held 2026-10-28primary
against this
- Chart's 2025 EBITDA margin before the termination fee was 21.2% (C10); guiding 17% two months after closing means the business bought is earning less than it did the year it was priced.
- The shares fell 6.7% the day after this guidance was given (C39), which is the market recording the same doubt.
- Chart's first part-quarter, July 16 to September 30, earned 17.6% (C55); on the Q3 call the finance chief said the fourth-quarter margin of 17.7% is a normal seasonal rise on a pro forma basis and that the 22% to 23% target for the second half of 2028 is not a straight line (C56).
- 2026-10-28editedQ3 results and call: first part-quarter margin 17.6% and the margin path to 2028 described as back-weighted
C17estimatemedium confidence
At the $57.83 close of September 25, 2026 the equity is worth about $57.4B; with roughly $14B of net debt the company is valued at about $71B, about 12.7 times pro forma 2026 adjusted EBITDA of roughly $5.6B. The six filed rivals' median is 10.35 times on the vendor's trailing basis - oilfield servicers at 7.3 to 14.1, GE Vernova at 95.1.
against this
- The pack's own trailing multiple for Baker Hughes, 12.7, excludes both Chart's debt and Chart's EBITDA, and the two roughly offset - so the premium to oilfield rivals is not an artefact of the deal.
- On adjusted earnings the shares cost about 21.6 times the last four quarters (C20), which reads dearer than the EBITDA multiple because interest on the Chart debt now sits between the two.
C43inferencelow confidence
Split by segment, the price looks like two businesses priced apart: valuing OFSE's 2026 guided EBITDA of $2.425B at the oilfield rivals' 10 times leaves about $47B of the roughly $71B for IET and Chart, about 13.5 times their combined annualised EBITDA of about $3.5B - above the oilfield servicers and far below GE Vernova.
derivedOFSE guide from C16; the 10 times is the rounded oilfield median of the pack's cohort (C17); IET's guided $2.725B plus Chart's second-half guide annualised to about $0.76B (C12); the enterprise value from C17.
against this
- Corporate costs of about $325M a year belong to someone; charging them to IET and Chart lifts their implied multiple to nearly 15 times.
- The oilfield multiple is itself at a cycle point - with oil near $100 and upstream spending still falling, a 10 times on 2026 OFSE EBITDA may be generous or mean, and the split is only as good as that input.
C07management claimmedium confidence
The chief executive said Power Systems generated about $1B of revenue in 2025, booked $2.6B of orders in Q2 2026 including about 150 gas turbines, and approached $4B of orders in the first half against $3.2B for all of 2025; data centres were $2.2B of Q2 2026 Power Systems orders.
against this
- None of these figures has a filed home: Power Systems is not a reported product line, so the revenue base the 3-4 times growth is struck on cannot be checked against a filing.
- The two largest named power awards (Dynamis, Kodiak) are sold to mobile-power and compression rental companies that re-rent the capacity, so the end demand is one step removed and cancellable further down the chain.
C53estimatemedium confidence
The 2026 adjusted EBITDA guide of $5.175B at its midpoint includes about $350M from Chart; without Chart, and without Power Systems' roughly $0.2B (its about $1B of 2025 revenue at IET's 20.6% Q2 2026 margin), the rest of Baker Hughes earns about $4.6B.
sourceBaker Hughes presentation at the Barclays Energy-Power…primaryBaker Hughes second-quarter 2026 earnings call, prepared…primaryBaker Hughes second-quarter 2026 results release (8-K Ex-99.1)primary
against this
- Power Systems' margin is not disclosed and may differ from IET's average.
- The guide is management's and Chart's contribution is weighted to the fourth quarter, so the split is approximate.
The company
Turning natural gas into liquid for shipping means chilling it to minus 162 degrees, and that takes giant compressors driven by gas turbines. Baker Hughes builds those machines, whole factory-made liquefaction modules for customers such as Venture Global, and gas turbines that data centres now use to make their own power.
Its other half, Oilfield Services & Equipment, drills and maintains oil and gas wells for producers. Some of its turbine designs are licensed from GE Vernova.
The evidence under this - 4 claims
C01facthigh confidence
Baker Hughes sells two different businesses. Oilfield Services & Equipment (OFSE) drills, completes and maintains oil and gas wells and makes subsea equipment for operators; Industrial & Energy Technology (IET) makes gas turbines, compressors, liquefaction trains and generators for LNG plants, pipelines, industrial users and power, and services them for life. In 2025 OFSE had revenue of $14.32B and segment EBITDA of $2.62B; IET had $13.41B and $2.48B.
C23facthigh confidence
Venture Global's own 10-K says it keeps 'a master supply relationship with Baker Hughes under a long-term master agreement' governing 'the supply of key liquefaction and power equipment', which 'secures equipment supply, pricing, and reserved manufacturing capacity' for existing and future projects and provides for long-term service arrangements; Venture Global lists 194 liquefaction trains across its projects, 152.0 mtpa expected.
C24factmedium confidence
In Q2 2026 Baker Hughes booked about $1.8B of LNG equipment across three projects - six liquefaction blocks (12 modules) for Venture Global's CP2, equipment for Cheniere's Sabine Pass Train 7, and four turbine-driven compressor trains for a Golar floating LNG vessel, its fourth Golar vessel - and $2.9B of LNG equipment in the first half, more than in all of 2025.
C27facthigh confidence
Baker Hughes depends on GE Vernova and GE Aerospace for core turbine technology: it sells heavy-duty gas turbines under a GE Vernova distribution and supply agreement that licenses GE Vernova's intellectual property, and buys aeroderivative engines through a 50/50 joint venture with GE Vernova, from which it purchased $800M in 2025; the 10-K lists losing either as a risk factor.
How it makes money
It earns money three ways: selling equipment, servicing it for the rest of its life, and charging oil companies well by well. In 2025 the oilfield half brought in $14.32B of sales and the equipment half $13.41B, each keeping about $2.5B before interest, tax and depreciation. The service business, $3.03B of sales, is the steady part: $16.7B of it is already signed.
The evidence under this - 3 claims
C01facthigh confidence
Baker Hughes sells two different businesses. Oilfield Services & Equipment (OFSE) drills, completes and maintains oil and gas wells and makes subsea equipment for operators; Industrial & Energy Technology (IET) makes gas turbines, compressors, liquefaction trains and generators for LNG plants, pipelines, industrial users and power, and services them for life. In 2025 OFSE had revenue of $14.32B and segment EBITDA of $2.62B; IET had $13.41B and $2.48B.
C25facthigh confidence
Gas Technology Services - spare parts, upgrades, overhauls and long-term service agreements on installed turbines and compressors - earned $3.03B of revenue in 2025, up 8%, booked $3.77B of orders, and held $16.7B of remaining obligations at June 30, 2026, more than five years of its current revenue.
C36facthigh confidence
In 2025 Baker Hughes booked $29.6B of orders - OFSE $14.7B, down from $15.2B and $16.3B in the two prior years, and IET a record $14.9B - and ended the year with $35.9B of RPO, 89% of which it expects to recognise within 15 years.
Where the money comes from, stream by stream
| Stream | Share of sales (FY2025) | How it earns it |
|---|---|---|
| Gas Technology Equipment | 23.9% | Turbines, compressors and liquefaction trains built to order for LNG plants, pipelines and power, booked years ahead. |
| Production Solutions | 13.7% | Artificial lift, oilfield chemicals and services that keep producing wells flowing, paid as operators produce. |
| Completions, Intervention and Measurements | 13.5% | Completion tools, wireline and well-intervention work for operators, priced job by job. |
| Well Construction | 13.1% | Drilling services, drill bits and drilling fluids, sold per well and tied to rig activity. |
| Subsea & Surface Pressure Systems | 11.3% | Subsea trees, flexible pipe and wellhead equipment for offshore and onshore projects; surface pressure control moved into a joint venture in 2026. |
| Gas Technology Services | 10.9% | Spare parts, upgrades, overhauls and long-term service agreements on the installed turbines and compressors. |
| Industrial Products | 7.2% | Valves, pumps, bearings and inspection equipment sold to industrial users; Waygate inspection is being sold. |
| Industrial Solutions | 4.0% | Condition monitoring and asset-performance software and hardware sold to plant operators. |
| Climate Technology Solutions | 2.3% | Carbon capture, hydrogen and new-energy equipment, mostly compression, sold project by project. |
| Chart (segment from July 16, 2026) | not disclosed | Cryogenic heat exchangers, cold boxes and storage for LNG, industrial gases and hydrogen; guided to $2.05B for the rest of 2026. |
Who runs it
Lorenzo Simonelli has run Baker Hughes since 2017, after running GE's oil and gas arm, and steered it toward gas equipment; Ahmed Moghal became finance chief in 2025. Insiders own a tiny slice, under 1%. The yearly bonus rides mostly on profit and cash flow, a little on sales; the long-term shares pay on turning profit into cash and on return on capital, not on size.
The evidence under this - 3 claims
C48facthigh confidence
Lorenzo Simonelli has been president and chief executive of Baker Hughes since 2017, after running GE Oil & Gas from 2013 to 2017, and is also chairman; Ahmed Moghal was promoted to chief financial officer on February 24, 2025, replacing Nancy Buese.
C46facthigh confidence
As of March 23, 2026 the 15 directors, nominees and executive officers as a group beneficially owned 1,839,049 shares including awards vesting by May 22, 2026, about 0.19% of 991.8M shares; Lorenzo Simonelli owned 1,066,266, about 0.11%, the largest insider; Vanguard (12.29%), JPMorgan (8.75%), BlackRock (8.53%) and State Street (6.57%) held over 5%. There is one class of common stock.
C47facthigh confidence
Baker Hughes' 2025 annual bonus paid 70% on revenue (10%), adjusted EBITDA (25%), adjusted EBITDA margin (10%), free cash flow (15%) and free-cash-flow conversion (10%) and 30% on strategic priorities; it funded at 113.5% of target. The 2025 PSUs, 60% of the chief executive's long-term award, pay half on free-cash-flow conversion against peers and half on three-year average ROIC against a 13.5% target, with a relative shareholder-return modifier of plus or minus 25%.
against this
- Revenue, adjusted EBITDA and adjusted EBITDA margin all came in under target in 2025 ($27.73B against $28.00B, $4.83B against $4.95B); the bonus funded above target because free cash flow ($2.73B against $2.35B) and conversion (57% against 47%) paid near the maximum.
- The ROIC goals were set before Chart; the proxy does not say how the acquisition's roughly $13.6B will be treated in the 2025 to 2027 average.
Why it wins, and who could beat it
Why customers come back
A plant built around Baker Hughes compressors cannot swap them mid-life, so the owner keeps buying parts, upgrades and overhauls from the maker for 20 to 30 years. Venture Global's own annual report describes a long-term agreement that reserves Baker Hughes factory capacity and bundles service with the equipment.
The weak spot is that some of the engines at the heart of those packages belong to GE Vernova and GE Aerospace, so part of that loyalty is theirs.
The evidence under this - 4 claims
C25facthigh confidence
Gas Technology Services - spare parts, upgrades, overhauls and long-term service agreements on installed turbines and compressors - earned $3.03B of revenue in 2025, up 8%, booked $3.77B of orders, and held $16.7B of remaining obligations at June 30, 2026, more than five years of its current revenue.
C26inferencemedium confidence
IET's advantage is the installed base: a customer that runs Baker Hughes turbines and compressors in an LNG plant or a pipeline buys parts, upgrades and overhauls from the maker for the life of the machine, and new orders extend that base - so the moat is a switching cost, visible from outside as service contracts signed for decades and a customer's filing that bundles service with supply.
derivedService remaining obligations of $16.7B, over five years of service revenue (C25); Venture Global's master agreement tying equipment supply to long-term service (C23); record Gas Technology Services upgrade orders on Cheniere's fleet (C24).
against this
- The aeroderivative engines at the core of many packages come from GE Aerospace through a 50/50 joint venture with GE Vernova (C27), so part of the switching cost belongs to the engine maker, not to Baker Hughes.
- Service growth is guided to level off in the second half of 2026 as catch-up on an overdue backlog fades (C04), and independent overhaul shops compete for older frames; the base is sticky but not a monopoly.
C23facthigh confidence
Venture Global's own 10-K says it keeps 'a master supply relationship with Baker Hughes under a long-term master agreement' governing 'the supply of key liquefaction and power equipment', which 'secures equipment supply, pricing, and reserved manufacturing capacity' for existing and future projects and provides for long-term service arrangements; Venture Global lists 194 liquefaction trains across its projects, 152.0 mtpa expected.
C27facthigh confidence
Baker Hughes depends on GE Vernova and GE Aerospace for core turbine technology: it sells heavy-duty gas turbines under a GE Vernova distribution and supply agreement that licenses GE Vernova's intellectual property, and buys aeroderivative engines through a 50/50 joint venture with GE Vernova, from which it purchased $800M in 2025; the 10-K lists losing either as a risk factor.
The threat
In power, GE Vernova sells its own turbines to the same buyers, and Caterpillar sells engine farms that do the same job. In the oilfield, SLB and Halliburton compete for every well, and operators owe Baker Hughes no loyalty. For Chart, gas producers such as Linde build some of the same equipment themselves.
The evidence under this - 4 claims
C28facthigh confidence
GE Vernova sells 'a wide spectrum of heavy-duty and aeroderivative gas turbines for utilities, independent power producers, and numerous industrial applications'; its Power segment was $5,477M of $11,141M of segment revenue in Q2 2026, and it names Siemens Energy and Mitsubishi Power - two of Baker Hughes' own named rivals - as its Power competitors.
C29facthigh confidence
Caterpillar sells reciprocating engines and generator sets and, through Solar Turbines, industrial gas turbines and compressor sets, and says it operates that business 'under highly competitive conditions, including intense price competition' - the other route to fast, modular on-site power that NovaLT turbines are sold against.
C30facthigh confidence
OFSE's named competitors - SLB, Halliburton, NOV, Weatherford and TechnipFMC - sell the same drilling, completions, artificial lift, chemicals and subsea products to the same operators; Baker Hughes' own 10-K says OFSE work is 'generally provided on a well-by-well basis' under contracts that 'do not necessarily establish an obligation to use' its products.
C31factmedium confidence
Chart's own 10-K says its rivals are 'regionally focused or product-specific' and that it also competes 'with several suppliers owned by the global industrial gas producers and in some cases they are also our customer'; Linde, the largest such producer, reports an Engineering segment of about 10% of its 2025 sales.
The rivals: GEV, CAT, SLB, HAL, LIN, WFRD, NOV, FTI, FLS, EMR.
Who else does this, rival by rival
| Ticker | Rival | Where it competes | How far along | Priced against it |
|---|---|---|---|---|
| GEV | GE Vernova (Gas Power: aeroderivative and heavy-duty gas turbines)Priced against it: Yes | Industrial & Energy Technology (IET) | On sale | Yes |
| CAT | Caterpillar (reciprocating generator sets and Solar Turbines)Priced against it: One segment only | Power Systems | On sale | One segment only |
| SLB · HAL | SLB and HalliburtonPriced against it: Yes | Oilfield Services & Equipment (OFSE) | On sale | Yes |
| LIN | Linde plc (Linde Engineering) and the other industrial-gas producers' equipment armsPriced against it: One segment only | Chart | On sale | One segment only |
| WFRD | Weatherford InternationalPriced against it: Yes | - | On sale | Yes |
| NOV | NOVPriced against it: Yes | - | On sale | Yes |
| FTI | TechnipFMCPriced against it: Yes | - | On sale | Yes |
| FLS | FlowservePriced against it: One segment only | - | On sale | One segment only |
| EMR | Emerson ElectricPriced against it: One segment only | - | On sale | One segment only |
How big it could get
How big this could get
The International Energy Agency counts more than 90 bcm a year of new LNG plant capacity approved in 2025, the second-biggest year on record, mostly in the United States. US exports rose 23% in the first half of 2026 as those plants started.
The war in the Gulf damaged two Qatari plants and delays the new supply's effect by at least two years, without stopping construction. Nobody publishes how much of that spending buys compressors.
The evidence under this - 3 claims
C32facthigh confidence
The International Energy Agency counts more than 90 bcm a year of LNG liquefaction capacity sanctioned in 2025, the second-strongest year on record, of which more than 80 bcm a year was in the United States - including Louisiana LNG, Corpus Christi Trains 8 and 9 and Venture Global's CP2 phase 1.
C33facthigh confidence
The IEA reports that Iranian missile attacks on Qatar's Ras Laffan complex in March 2026 damaged two liquefaction trains of 17.5 bcm a year that QatarEnergy says will take three to five years to repair; the conflict has cost about 120 bcm of cumulative LNG supply for 2026-2030 and delays the effect of the new LNG wave 'by at least two years'.
C34facthigh confidence
US LNG exports averaged 17.4 Bcf a day in the first half of 2026, 23% more than a year earlier, as Plaquemines, Corpus Christi Stage 3 and Golden Pass ramped up, according to the EIA.
Who has signed
Venture Global has a long-term supply agreement, though it commits to no volume. Dynamis ordered 76 turbines, about 1.3 GW, and Kodiak agreed about 1 GW with room for 1.8 GW. Most of the $37.1B of signed work cannot be cancelled without a penalty.
The evidence under this - 3 claims
C23facthigh confidence
Venture Global's own 10-K says it keeps 'a master supply relationship with Baker Hughes under a long-term master agreement' governing 'the supply of key liquefaction and power equipment', which 'secures equipment supply, pricing, and reserved manufacturing capacity' for existing and future projects and provides for long-term service arrangements; Venture Global lists 194 liquefaction trains across its projects, 152.0 mtpa expected.
C41facthigh confidence
Two named power orders in Q2 2026: Dynamis Power Solutions ordered 76 NovaLT16 turbines, about 1.3 GW, for mobile power at data centres and oil and gas sites; Kodiak Gas Services signed a multi-year agreement with an initial award for about 1 GW and a framework 'providing a pathway for up to 1.8 GW over time'.
C03facthigh confidence
IET booked a record $7.09B of orders in Q2 2026, double Q2 2025, a book-to-bill of 2.2; IET's remaining performance obligations reached $37.1B at June 30, 2026, up 19% on a year earlier - $15.0B of Gas Technology Equipment and $16.7B of Gas Technology Services. RPO excludes orders a customer can cancel without a substantive penalty.
sourceBaker Hughes second-quarter 2026 results release (8-K Ex-99.1)primaryBaker Hughes Company Form 10-K for the fiscal year ended…primary
- 2026-10-28editedMade historical: Q3 2026 orders and remaining obligations replace it as the current figures (C55)
Where the growth is coming from, business by business
Where the growth is coming from
| Business | Share of revenue | Growth: last quarter | Last half-year | Last year | Share in 3 years at its half-year rate |
|---|---|---|---|---|---|
| Oilfield Services And Equipment | 51% | -4.6% | -6.0% | -7.1% | 42% |
| Industrial And Energy Technology | 49% | -0.1% | +6.8% | +9.2% | 58% |
| Whole company | 100% | -2.4% | -0.1% | +0.4% | 100% |
On the filed split through 2026-06-30, if each business keeps its last half-year's growth, the company grows about 0% next year and 1% in year 3, against 0.4% over the last twelve months. A scenario, not a forecast: no business holds its rate.
The results
The numbers
Is it growing?Slow
Sales grew 3.7% over the twelve months to Sep 2026, about the same pace as the −0.3% in the year to Dec 2025.
Is it profitable?Healthy
It keeps 10% of sales as profit, up from 7.6% in the year to Dec 2023.
How steady is it?Uneven
Yearly sales growth has ranged from −1.0% to +21% over the last 5 years, with sales falling in 2 of them.
Does it earn good returns?Strong
Shareholders' money earned 15% a year, up from −1.6% in the year to Dec 2021.
Is it making cash?Solid
It turned 11% of sales into free cash, $3.23B over the last twelve months.
Is profit turning into cash?Real cash
Free cash flow was 1.1 times net income.
All the numbers
Filed figures from the company's 10-K and 10-Q, read 2026-10-28. Fiscal years end in December.
| Dec 2021 | Dec 2022 | Dec 2023 | Dec 2024 | Dec 2025 | 12 mo to Sep 2026 | |
|---|---|---|---|---|---|---|
| Size and growth | ||||||
| Sales | $20.5B | $21.2B | $25.5B | $27.8B | $27.7B | $28.7B |
| Sales growth | −1.0% | +3.2% | +21% | +9.1% | −0.3% | +3.7% |
| Profit | ||||||
| Operating margin | 6.4% | 5.6% | 9.1% | 11% | - | - |
| Net margin | −1.1% | −2.8% | 7.6% | 11% | 9.3% | 10% |
| What growth costs, per sales dollar | ||||||
| Research and development | 2.4% | 2.6% | 2.6% | 2.3% | 2.2% | 2.0% |
| Selling, general and admin | 12% | 12% | 10% | 8.8% | 8.6% | 8.7% |
| Pay in shares | 1.0% | 1.0% | 0.8% | 0.7% | 0.7% | 0.7% |
| Capital spending | 4.2% | 4.7% | 4.8% | 4.6% | 4.6% | 4.5% |
| Cash | ||||||
| Cash from operations | $2.37B | $1.89B | $3.06B | $3.33B | $3.81B | $4.51B |
| Free cash flow | $1.52B | $899M | $1.84B | $2.05B | $2.54B | $3.23B |
| Balance sheet | ||||||
| Debt | $6.73B | $6.66B | $6.02B | $6.02B | $6.09B | $18.3B |
| Returns and shares | ||||||
| Return on capital | - | - | 8.1% | 13% | - | - |
What growth costs
Baker Hughes has grown more profitable by trimming overhead: office and research costs take a smaller share of each sales dollar than five years ago. Lately that came from cost cuts while sales stood still, not from growing, and more money now goes into factories.
The evidence under this - 2 claims
C50facthigh confidence
Per sales dollar, selling, general and administrative costs fell from 12.0 cents in 2021 to 8.6 in 2025 and in the four quarters to June 2026, R&D from 2.4 to 2.2 and 2.1, and stock pay from 1.0 to 0.7, while capital spending rose from 4.2 to 4.6 and 4.7; revenue rose 35% to $27.7B over the four quarters to June 2026 while SG&A dollars fell.
sourceBaker Hughes XBRL company facts, FY2020 to Q2 2026, frozen…primaryBaker Hughes Company Form 10-K for the fiscal year ended…primaryBaker Hughes Form 10-Q for the quarter ended June 30, 2026primary
against this
- Revenue was flat from 2024 to 2025 (C02), so the recent fall per sales dollar came from cost cuts, paid for with restructuring charges of $313M, $260M and $215M from 2023 to 2025, rather than from scale.
- Capital spending per sales dollar rose, and turbine capacity is being added for Power Systems (C08), so the cost of growth is moving into the factory.
C02facthigh confidence
Total revenue has not grown for two years: $27.83B in 2024, $27.73B in 2025, and $6.74B in Q2 2026, down 2% on Q2 2025, which the company attributes mainly to selling its sensors business (PSI) and putting surface pressure control (SPC) into a joint venture. OFSE revenue fell 8% in 2025 while IET rose 10%.
The last report (26 Jul)
Quarter ended June 2026, filed figures.
-2%
Sales growth
against the same quarter a year earlier
2.4%
Growth from the quarter before
against -10.8% the quarter before that
Third-quarter sales were $8.0B, up 14% mostly from buying Chart. Equipment orders were $5.9B and the order book reached a record $39.4B, but the equipment business kept 19.7 cents of each sales dollar, down from 20.6. Chart, owned since July 16, kept 17.6.
On the call management raised its multi-year equipment order goal to more than $50B and said 2027 growth will be low to mid single digit, with most of the margin gain coming in 2028.
What it did to the thesisIt split the test we wrote down: orders and Chart cleared their marks, but the equipment margin missed its line. The order book is stronger, but the profit gains sit further out, so our view holds.
The quarter in detail
Sales growth from the previous quarter, filed figures.
Earnings per share $0.64 against $0.50 expected.
The evidence under this - 4 claims
C55facthigh confidence
Baker Hughes' Q3 2026 orders were $10,764M, up 31% on Q3 2025; IET orders $5,886M (Gas Technology Equipment $3,120M, down 36% on Q2's record); IET remaining performance obligations a record $39.4B, up $2.3B on June; IET EBITDA margin 19.7% on $3,477M revenue, against 20.6% in Q2 2026, 18.8% in Q3 2025 and a guide of 19.9%; Chart earned $156M of EBITDA on $888M revenue (17.6%) from July 16 to September 30; free cash flow was $769M and adjusted EBITDA $1,415M.
C56management claimmedium confidence
On the Q3 2026 call management said IET orders were $18B in the first nine months, of which data centres $4.9B (up about 500%), raised its Horizon 2 IET order target by $10B to more than $50B with power systems orders up to $15B and LNG equipment orders approaching $10B, said Power Systems is under 20% of remaining obligations, that customer contracts carry non-refundable down payments and cancellation penalties, and for 2027 expected book-to-bill above 1x, IET organic growth of low to mid single digits with a first-quarter seasonal fall, Chart revenue growth of low to mid single digits on a $2B second-half-2026 base, and Chart margins rising through 2027 toward 22% to 23% in the second half of 2028 with a more meaningful step in 2028.
against this
- The CFO said 2027 growth is constrained by a lower starting backlog and mix in the first half, so the margin gains the thesis waits for are mostly 2028.
- The Q4 outlook assumes Middle East activity falls back to Q2 levels; the company said the pace of normalisation is an important variable.
C05facthigh confidence
IET's EBITDA margin was 20.6% in Q2 2026 against 17.8% in Q2 2025, and IET EBITDA rose 21% to $2.48B in 2025 on revenue up 10%; the company attributes the gain to price, productivity and cost-out.
C12management claimmedium confidence
Baker Hughes guides Chart to $2.05B of revenue and $350M of EBITDA from July 16 to year-end 2026, about 17%, with 55% to 65% weighted to the fourth quarter, citing LNG project timing, soft hydrogen demand and first-of-a-kind project margins; it targets a Chart EBITDA margin of 22% to 23% in the second half of 2028 and $325M of annualised cost savings by year three ($95M in year one), with $35M executed by September 9.
sourceBaker Hughes presentation at the Barclays Energy-Power…primaryBaker Hughes second-quarter 2026 earnings call, prepared…primaryBaker Hughes Completes Acquisition of Chart Industries (8-K…primaryBaker Hughes Announces Third-Quarter 2026 Results, Form 8-K…primaryQ3 2026 earnings call transcript (FMP), held 2026-10-28primary
against this
- Chart's 2025 EBITDA margin before the termination fee was 21.2% (C10); guiding 17% two months after closing means the business bought is earning less than it did the year it was priced.
- The shares fell 6.7% the day after this guidance was given (C39), which is the market recording the same doubt.
- Chart's first part-quarter, July 16 to September 30, earned 17.6% (C55); on the Q3 call the finance chief said the fourth-quarter margin of 17.7% is a normal seasonal rise on a pro forma basis and that the 22% to 23% target for the second half of 2028 is not a straight line (C56).
- 2026-10-28editedQ3 results and call: first part-quarter margin 17.6% and the margin path to 2028 described as back-weighted
What management did with the money
It spent about $13.6B on Chart, paid in cash and debt, stopped buying back shares and is selling its inspection business for about $1.45B. It aims to bring debt back to 1 to 1.5 times yearly profit within two years.
Insiders in 2026Q2: 12 purchases and 10 sales, from their Form 4 filings.
The evidence under this - 3 claims
C09facthigh confidence
Baker Hughes completed its purchase of Chart Industries on July 16, 2026 for $210 a share in cash, an enterprise value of about $13.6B, funded with cash on hand, a $6.5B plus EUR 3.0B notes offering in March 2026 and $2.0B of two-year term loans drawn in July; Chart became a third reporting segment.
C15management claimmedium confidence
Baker Hughes targets net leverage of 1.0 to 1.5 times within 24 months of the Chart close, through free cash flow, the savings, and portfolio sales including Waygate Technologies, agreed with Hexagon for about $1.45B in cash.
sourceBaker Hughes Completes Acquisition of Chart Industries (8-K…primaryBaker Hughes second-quarter 2026 results release (8-K Ex-99.1)primaryBaker Hughes presentation at the Barclays Energy-Power…primary
against this
- The same presentation cut 2026 free-cash-flow conversion to 40%-45% of adjusted EBITDA because of acquisition interest and integration costs, so less cash is available for debt reduction in the first year.
- Buybacks stopped in 2026 (C38) - deleveraging is being paid for partly by holding back shareholder returns.
C38facthigh confidence
Shares outstanding were 992M at June 30, 2026 against 987M at December 31, 2025; there were no buybacks in the first half of 2026 against $384M in 2025, with about $1.3B of authorisation left, and the dividend is $0.23 a quarter.
The price, and where we disagree
In short. Fair, not cheap. The price pays for promised profit gains in the equipment business and for Chart, a company it bought, recovering. Little is left if either slips.
Share price
$57.83
close,
Company value for each $1 of cash profit
12.7
rivals' middle 10.4 · its 6-year normal 10.4
Chart joined on July 16, 2026, and two months later Baker Hughes said it would earn about 17 cents on each dollar for the rest of the year, less than in 2025. The shares fell 6.7% the next day.
Before that, the shares had risen over the year while sales per share stood still: buyers were paying more for the same business. The Q3 results, the first with Chart inside, came on October 27: orders were strong and the equipment margin slipped.
The evidence under this - 4 claims
C09facthigh confidence
Baker Hughes completed its purchase of Chart Industries on July 16, 2026 for $210 a share in cash, an enterprise value of about $13.6B, funded with cash on hand, a $6.5B plus EUR 3.0B notes offering in March 2026 and $2.0B of two-year term loans drawn in July; Chart became a third reporting segment.
C12management claimmedium confidence
Baker Hughes guides Chart to $2.05B of revenue and $350M of EBITDA from July 16 to year-end 2026, about 17%, with 55% to 65% weighted to the fourth quarter, citing LNG project timing, soft hydrogen demand and first-of-a-kind project margins; it targets a Chart EBITDA margin of 22% to 23% in the second half of 2028 and $325M of annualised cost savings by year three ($95M in year one), with $35M executed by September 9.
sourceBaker Hughes presentation at the Barclays Energy-Power…primaryBaker Hughes second-quarter 2026 earnings call, prepared…primaryBaker Hughes Completes Acquisition of Chart Industries (8-K…primaryBaker Hughes Announces Third-Quarter 2026 Results, Form 8-K…primaryQ3 2026 earnings call transcript (FMP), held 2026-10-28primary
against this
- Chart's 2025 EBITDA margin before the termination fee was 21.2% (C10); guiding 17% two months after closing means the business bought is earning less than it did the year it was priced.
- The shares fell 6.7% the day after this guidance was given (C39), which is the market recording the same doubt.
- Chart's first part-quarter, July 16 to September 30, earned 17.6% (C55); on the Q3 call the finance chief said the fourth-quarter margin of 17.7% is a normal seasonal rise on a pro forma basis and that the 22% to 23% target for the second half of 2028 is not a straight line (C56).
- 2026-10-28editedQ3 results and call: first part-quarter margin 17.6% and the margin path to 2028 described as back-weighted
C39factmedium confidence
The shares fell 6.7% on September 10, 2026, from $63.64 to $59.40, the session after Baker Hughes guided Chart to about 17% margins for the rest of 2026 and free cash flow conversion of 40% to 45%; coverage that day gave Chart's near-term headwinds as the reason.
C18facthigh confidence
Over the 252 sessions to September 25, 2026 the shares rose 16.0% while revenue per share fell 0.1%: all of the rise was buyers paying more per dollar of sales, a multiple up 16.1%.
The betSafe, little upside
If it works
0.9×
from today's value, at the stated multiple
If it fails
keep 82%
of today's market value: the rest of the company, less its debt
How we read the multiple
Buyers pay about 13 times a year's cash profit for the whole company, debt included. The middle of its rivals is about 10; GE Vernova, a power-equipment maker, costs far more.
That is a fair middle for a company that is half oilfield services, half equipment.
For the price to work, the equipment half must keep earning more on each dollar of sales and Chart must recover as promised. The price does not pay for the plan to triple power-equipment sales.
Against its own history. Buyers now pay more than the company's own normal, which says the market already believes the order boom.
The evidence under this - 3 claims
C17estimatemedium confidence
At the $57.83 close of September 25, 2026 the equity is worth about $57.4B; with roughly $14B of net debt the company is valued at about $71B, about 12.7 times pro forma 2026 adjusted EBITDA of roughly $5.6B. The six filed rivals' median is 10.35 times on the vendor's trailing basis - oilfield servicers at 7.3 to 14.1, GE Vernova at 95.1.
against this
- The pack's own trailing multiple for Baker Hughes, 12.7, excludes both Chart's debt and Chart's EBITDA, and the two roughly offset - so the premium to oilfield rivals is not an artefact of the deal.
- On adjusted earnings the shares cost about 21.6 times the last four quarters (C20), which reads dearer than the EBITDA multiple because interest on the Chart debt now sits between the two.
C43inferencelow confidence
Split by segment, the price looks like two businesses priced apart: valuing OFSE's 2026 guided EBITDA of $2.425B at the oilfield rivals' 10 times leaves about $47B of the roughly $71B for IET and Chart, about 13.5 times their combined annualised EBITDA of about $3.5B - above the oilfield servicers and far below GE Vernova.
derivedOFSE guide from C16; the 10 times is the rounded oilfield median of the pack's cohort (C17); IET's guided $2.725B plus Chart's second-half guide annualised to about $0.76B (C12); the enterprise value from C17.
against this
- Corporate costs of about $325M a year belong to someone; charging them to IET and Chart lifts their implied multiple to nearly 15 times.
- The oilfield multiple is itself at a cycle point - with oil near $100 and upstream spending still falling, a 10 times on 2026 OFSE EBITDA may be generous or mean, and the split is only as good as that input.
C16management claimmedium confidence
Updated 2026 guidance including Chart from July 16: revenue $28.5B-$30.3B, adjusted EBITDA $4.875B-$5.475B (midpoint $5.175B), IET EBITDA $2.725B on $13.5B revenue, OFSE EBITDA $2.425B on $13.85B, and free cash flow of 40% to 45% of adjusted EBITDA.
against this
- The Q2 2026 guidance assumes Middle East activity stays at Q2 levels; the company says a material change 'could result in outcomes that differ either positively or negatively'.
- Chart's contribution is 55%-65% in one quarter (C12), so the full-year figure rests on a single fourth quarter.
Priced against its rivals
The competitors its own annual report names, each confirmed against the rival's filing. Measured on company value for each $1 of cash profit, cheapest first:
| Ticker | Company | company value for each $1 of cash profit |
|---|---|---|
| WFRD | Weatherford International | 7.3× |
| HAL | Halliburton Company | 9.0× |
| NOV | NOV | 9.4× |
| SLB | SLB Limited | 11.3× |
| BKR | Baker Hughes Company | 12.7× |
| FTI | TechnipFMC | 14.1× |
| GEV | GE Vernova | 95.1× |
The middle of the other 6 is 10.4. Baker Hughes Company is 3rd dearest of 7.
Rivals' figures come from a data provider, so read the spread of the group rather than any single pair.
Buyers pay more per dollar of profit than for oilfield rivals because of the equipment half, and far less than for a power-equipment maker.
Private or foreign rivals that cannot be priced: Siemens Energy AG, Mitsubishi Heavy Industries, Ltd., Sulzer AG.
The bet: what it pays if it works
The bet is on Power Systems, the small gas turbines Baker Hughes sells to power data centres on site. Orders are booming, but its sales appear only in what the boss says on calls, and new factory space arrives from next year.
Counting the rest of the company at the rivals' usual price, even tripled sales would leave the shares worth a little less than today. If the line stalls, shareholders keep the rest, about four-fifths of today's value.
| Power Systems revenue in two to three years | Gas turbines a year needed | At the stated multiple |
|---|---|---|
| $2.00B | about 116 at 100% kept | 0.9× |
| $3.00B (the big win) | about 173 at 100% kept | 0.9× |
| $5.00B | about 289 at 100% kept | 1.0× |
To pay 2× (a Fair bet) it would need about $32.39B of Power Systems revenue (about 1.9K gas turbines a year); to pay 5× (a Cheap bet), about $115.15B of Power Systems revenue (about 6.7K gas turbines a year), at the same multiple.
Each row is Power Systems alone, plus the rest of the company (LNG and pipeline equipment and service, oilfield services (the rest of Baker Hughes, before Chart)) counted at about $47.84B.
The steps it has to take
- Done Orders for about 150 turbines in one quarter
- Done Named data-centre and mobile-power awards: Dynamis and Kodiak
- Not started First new NovaLT capacity online due 2027-06-30
- Not started Gas turbine capacity doubled from 2026 levels due 2028-12-31
- Not started Power Systems revenue about three times 2025 due 2029-12-31
The detail behind the label
Rating
Expensive
the big win's payoff against the 2× and 5× lines
Cheap bet at about
≈ $10.38
82% below the price (close, )
The option
0.6×
what Power Systems is worth if it works, against what the price pays for it
The evidence under this - 5 claims
C07management claimmedium confidence
The chief executive said Power Systems generated about $1B of revenue in 2025, booked $2.6B of orders in Q2 2026 including about 150 gas turbines, and approached $4B of orders in the first half against $3.2B for all of 2025; data centres were $2.2B of Q2 2026 Power Systems orders.
against this
- None of these figures has a filed home: Power Systems is not a reported product line, so the revenue base the 3-4 times growth is struck on cannot be checked against a filing.
- The two largest named power awards (Dynamis, Kodiak) are sold to mobile-power and compression rental companies that re-rent the capacity, so the end demand is one step removed and cancellable further down the chain.
C08management claimmedium confidence
Management says added turbine and generator capacity coming online by 2029 could support nearly $5B of annual Power Systems revenue at full utilisation - 3 to 4 times 2025 at a practical rate - with gas turbine capacity doubling from 2026 levels by the end of 2028 and the first new NovaLT capacity in the first half of 2027, on paybacks it puts below two years.
against this
- It is a capacity statement, not an order book: revenue at that level needs the orders to keep arriving through 2028 at prices near 2025's.
- GE Vernova, Siemens Energy and Caterpillar are adding gas-turbine and engine capacity into the same demand at the same time (S12, S13), which is how a shortage turns into a price war.
C41facthigh confidence
Two named power orders in Q2 2026: Dynamis Power Solutions ordered 76 NovaLT16 turbines, about 1.3 GW, for mobile power at data centres and oil and gas sites; Kodiak Gas Services signed a multi-year agreement with an initial award for about 1 GW and a framework 'providing a pathway for up to 1.8 GW over time'.
C53estimatemedium confidence
The 2026 adjusted EBITDA guide of $5.175B at its midpoint includes about $350M from Chart; without Chart, and without Power Systems' roughly $0.2B (its about $1B of 2025 revenue at IET's 20.6% Q2 2026 margin), the rest of Baker Hughes earns about $4.6B.
sourceBaker Hughes presentation at the Barclays Energy-Power…primaryBaker Hughes second-quarter 2026 earnings call, prepared…primaryBaker Hughes second-quarter 2026 results release (8-K Ex-99.1)primary
against this
- Power Systems' margin is not disclosed and may differ from IET's average.
- The guide is management's and Chart's contribution is weighted to the fourth quarter, so the split is approximate.
C17estimatemedium confidence
At the $57.83 close of September 25, 2026 the equity is worth about $57.4B; with roughly $14B of net debt the company is valued at about $71B, about 12.7 times pro forma 2026 adjusted EBITDA of roughly $5.6B. The six filed rivals' median is 10.35 times on the vendor's trailing basis - oilfield servicers at 7.3 to 14.1, GE Vernova at 95.1.
against this
- The pack's own trailing multiple for Baker Hughes, 12.7, excludes both Chart's debt and Chart's EBITDA, and the two roughly offset - so the premium to oilfield rivals is not an artefact of the deal.
- On adjusted earnings the shares cost about 21.6 times the last four quarters (C20), which reads dearer than the EBITDA multiple because interest on the Chart debt now sits between the two.
Where we disagree with the market
The market believes
A winner from LNG and data-centre power, with record orders that will lift profits.
We believe
The orders are real, but they reach sales after 2027 and Chart has slipped.
Analysts are mostly positive and growing more so. The orders are real, but the filings show sales flat, an equipment margin that slipped to 19.7% in Q3 2026, and Chart earning less than when it was bought.
We could be wrong if the better prices on signed orders show up sooner: equipment margins above 21% for two quarters, with Chart back above 20%, would say the market saw it first.
What analysts say, and the evidence
Analysts positive
79%
of 24, 1 Sep
Four months earlier
74%
of 23, 1 May
The evidence under this - 6 claims
C19factmedium confidence
Analysts are positive: the vendor snapshot counts 30 buy, 14 hold and 1 sell, and its dated series shows 79.2% of 24 analysts positive on September 1, 2026 against 70.8% of 24 on January 1, 2026, with the panel size unchanged.
C18facthigh confidence
Over the 252 sessions to September 25, 2026 the shares rose 16.0% while revenue per share fell 0.1%: all of the rise was buyers paying more per dollar of sales, a multiple up 16.1%.
C03facthigh confidence
IET booked a record $7.09B of orders in Q2 2026, double Q2 2025, a book-to-bill of 2.2; IET's remaining performance obligations reached $37.1B at June 30, 2026, up 19% on a year earlier - $15.0B of Gas Technology Equipment and $16.7B of Gas Technology Services. RPO excludes orders a customer can cancel without a substantive penalty.
sourceBaker Hughes second-quarter 2026 results release (8-K Ex-99.1)primaryBaker Hughes Company Form 10-K for the fiscal year ended…primary
- 2026-10-28editedMade historical: Q3 2026 orders and remaining obligations replace it as the current figures (C55)
C04management claimmedium confidence
The chief financial officer said on the Q2 2026 call that given longer equipment cycle times 'a meaningful portion of the GTE order mix' extends beyond 2027, so the record orders reach revenue slowly; IET revenue guidance for 2026 was held at $13.5B while order guidance was raised to $17.5B-$19.5B.
sourceBaker Hughes second-quarter 2026 earnings call, prepared…primaryBaker Hughes presentation at the Barclays Energy-Power…primary
against this
- IET revenue was $3.29B in Q2 2026, flat on Q2 2025, while orders doubled - the lag is already visible and not only asserted.
- Gas Technology Services growth is guided to level off in the second half of 2026 as catch-up on the overdue aeroderivative backlog fades, so near-term IET revenue has less support than the order line suggests.
C12management claimmedium confidence
Baker Hughes guides Chart to $2.05B of revenue and $350M of EBITDA from July 16 to year-end 2026, about 17%, with 55% to 65% weighted to the fourth quarter, citing LNG project timing, soft hydrogen demand and first-of-a-kind project margins; it targets a Chart EBITDA margin of 22% to 23% in the second half of 2028 and $325M of annualised cost savings by year three ($95M in year one), with $35M executed by September 9.
sourceBaker Hughes presentation at the Barclays Energy-Power…primaryBaker Hughes second-quarter 2026 earnings call, prepared…primaryBaker Hughes Completes Acquisition of Chart Industries (8-K…primaryBaker Hughes Announces Third-Quarter 2026 Results, Form 8-K…primaryQ3 2026 earnings call transcript (FMP), held 2026-10-28primary
against this
- Chart's 2025 EBITDA margin before the termination fee was 21.2% (C10); guiding 17% two months after closing means the business bought is earning less than it did the year it was priced.
- The shares fell 6.7% the day after this guidance was given (C39), which is the market recording the same doubt.
- Chart's first part-quarter, July 16 to September 30, earned 17.6% (C55); on the Q3 call the finance chief said the fourth-quarter margin of 17.7% is a normal seasonal rise on a pro forma basis and that the 22% to 23% target for the second half of 2028 is not a straight line (C56).
- 2026-10-28editedQ3 results and call: first part-quarter margin 17.6% and the margin path to 2028 described as back-weighted
C06management claimmedium confidence
Management says the backlog was booked 'within our disciplined commercial framework' in a supply-demand environment with 'strong pricing dynamics', and expects that pricing to provide 'meaningful favorable tailwind for IET margin performance in 2027 and beyond'.
against this
- Q3 2026 IET guidance of about $660M EBITDA on $3.32B revenue is about 19.9%, below Q2 2026's 20.6% - the tailwind is not yet visible in the next quarter's guide.
- Much of the new backlog is fixed-price equipment for first-of-a-kind configurations (Chart cites 'margin impact from first-of-a-kind projects'), where cost overruns rather than price decide the margin.
What could go wrong, and how we would know
The risks
- Chart may stay below plan. It was bought on 2025 numbers and is now guided lower, with most of this year's profit left to one quarter.
- A partner that competes. GE Vernova licenses some turbines and co-owns the engine venture, yet sells to the same buyers; the agreements' end dates are not disclosed.
- The oilfield half is shrinking. Operators are spending less in 2026 and the Middle East conflict cut regional sales 13%.
- More debt, fewer buybacks. About $14B of net debt after Chart means interest and repayment come before shareholders for about two years.
- Fixed prices on new designs. Some large orders are first-of-their-kind projects, where cost overruns, not price, decide the profit.
The evidence under this - 6 claims
C12management claimmedium confidence
Baker Hughes guides Chart to $2.05B of revenue and $350M of EBITDA from July 16 to year-end 2026, about 17%, with 55% to 65% weighted to the fourth quarter, citing LNG project timing, soft hydrogen demand and first-of-a-kind project margins; it targets a Chart EBITDA margin of 22% to 23% in the second half of 2028 and $325M of annualised cost savings by year three ($95M in year one), with $35M executed by September 9.
sourceBaker Hughes presentation at the Barclays Energy-Power…primaryBaker Hughes second-quarter 2026 earnings call, prepared…primaryBaker Hughes Completes Acquisition of Chart Industries (8-K…primaryBaker Hughes Announces Third-Quarter 2026 Results, Form 8-K…primaryQ3 2026 earnings call transcript (FMP), held 2026-10-28primary
against this
- Chart's 2025 EBITDA margin before the termination fee was 21.2% (C10); guiding 17% two months after closing means the business bought is earning less than it did the year it was priced.
- The shares fell 6.7% the day after this guidance was given (C39), which is the market recording the same doubt.
- Chart's first part-quarter, July 16 to September 30, earned 17.6% (C55); on the Q3 call the finance chief said the fourth-quarter margin of 17.7% is a normal seasonal rise on a pro forma basis and that the 22% to 23% target for the second half of 2028 is not a straight line (C56).
- 2026-10-28editedQ3 results and call: first part-quarter margin 17.6% and the margin path to 2028 described as back-weighted
C11estimatemedium confidence
Baker Hughes paid about 15.0 times Chart's 2025 EBITDA before the termination fee ($13.6B against about $905.7M), or about 11.1 times if the full $325M of targeted cost savings arrives.
derivedEnterprise value of about $13.6B from the 10-Q (C09) divided by 2025 operating income of $358.4M plus the $266.0M fee plus $281.3M of depreciation and amortisation (C10); the second figure adds the $325M year-3 synergy target (C12) to the denominator.
against this
- Chart's own 2025 figure includes project and merger costs besides the fee, so its underlying EBITDA may be somewhat higher and the multiple lower than 15.0.
- Second-half 2026 guidance implies Chart earns about 17% EBITDA margins on revenue near $4.4B a year - roughly $0.76B, not $0.9B - so on what Baker Hughes actually bought this year the multiple is nearer 18 times.
C27facthigh confidence
Baker Hughes depends on GE Vernova and GE Aerospace for core turbine technology: it sells heavy-duty gas turbines under a GE Vernova distribution and supply agreement that licenses GE Vernova's intellectual property, and buys aeroderivative engines through a 50/50 joint venture with GE Vernova, from which it purchased $800M in 2025; the 10-K lists losing either as a risk factor.
C22facthigh confidence
OFSE revenue was $3.45B in Q2 2026, down 5% on Q2 2025, with Middle East/Asia down 13% as the regional conflict disrupted activity; OFSE's EBITDA margin was 17.5% against 18.7%, and management expects global upstream spending to 'decline modestly' in 2026 despite oil prices near $100.
C14estimatemedium confidence
After paying about $13.6B for Chart and drawing $2.0B of term loans, net debt is roughly $14B - about 2.5 times a pro forma 2026 adjusted EBITDA of roughly $5.6B, against 0.1 times at June 30.
derivedJune 30 net debt of $0.53B (C13) plus the $13.6B enterprise value paid (C09), less Chart's own cash; the EBITDA is the stand-alone 2026 guide of about $4.85B plus Chart's second-half guide of $350M (C12) annualised to about $0.76B.
against this
- The Waygate sale for about $1.45B, expected at year-end, would cut net debt by roughly a tenth on its own (C15).
- Chart's cash and the exact refinancing of its $3.57B of debt are not yet filed, so the figure could be several hundred million either way until the Q3 2026 10-Q.
C06management claimmedium confidence
Management says the backlog was booked 'within our disciplined commercial framework' in a supply-demand environment with 'strong pricing dynamics', and expects that pricing to provide 'meaningful favorable tailwind for IET margin performance in 2027 and beyond'.
against this
- Q3 2026 IET guidance of about $660M EBITDA on $3.32B revenue is about 19.9%, below Q2 2026's 20.6% - the tailwind is not yet visible in the next quarter's guide.
- Much of the new backlog is fixed-price equipment for first-of-a-kind configurations (Chart cites 'margin impact from first-of-a-kind projects'), where cost overruns rather than price decide the margin.
What we still do not know
- Exactly how much debt is left after paying for Chart. The Q3 release gave no net debt; the quarterly filing will.
- When the GE Vernova agreements end, and on what terms. Neither company states it.
- How big the power-equipment business is. It is not reported separately, and the $1B figure is management's.
- What customers pay for service compared with what a stopped plant costs them. Nobody publishes it.
The evidence under this - 4 claims
C14estimatemedium confidence
After paying about $13.6B for Chart and drawing $2.0B of term loans, net debt is roughly $14B - about 2.5 times a pro forma 2026 adjusted EBITDA of roughly $5.6B, against 0.1 times at June 30.
derivedJune 30 net debt of $0.53B (C13) plus the $13.6B enterprise value paid (C09), less Chart's own cash; the EBITDA is the stand-alone 2026 guide of about $4.85B plus Chart's second-half guide of $350M (C12) annualised to about $0.76B.
against this
- The Waygate sale for about $1.45B, expected at year-end, would cut net debt by roughly a tenth on its own (C15).
- Chart's cash and the exact refinancing of its $3.57B of debt are not yet filed, so the figure could be several hundred million either way until the Q3 2026 10-Q.
C27facthigh confidence
Baker Hughes depends on GE Vernova and GE Aerospace for core turbine technology: it sells heavy-duty gas turbines under a GE Vernova distribution and supply agreement that licenses GE Vernova's intellectual property, and buys aeroderivative engines through a 50/50 joint venture with GE Vernova, from which it purchased $800M in 2025; the 10-K lists losing either as a risk factor.
C07management claimmedium confidence
The chief executive said Power Systems generated about $1B of revenue in 2025, booked $2.6B of orders in Q2 2026 including about 150 gas turbines, and approached $4B of orders in the first half against $3.2B for all of 2025; data centres were $2.2B of Q2 2026 Power Systems orders.
against this
- None of these figures has a filed home: Power Systems is not a reported product line, so the revenue base the 3-4 times growth is struck on cannot be checked against a filing.
- The two largest named power awards (Dynamis, Kodiak) are sold to mobile-power and compression rental companies that re-rent the capacity, so the end demand is one step removed and cancellable further down the chain.
C26inferencemedium confidence
IET's advantage is the installed base: a customer that runs Baker Hughes turbines and compressors in an LNG plant or a pipeline buys parts, upgrades and overhauls from the maker for the life of the machine, and new orders extend that base - so the moat is a switching cost, visible from outside as service contracts signed for decades and a customer's filing that bundles service with supply.
derivedService remaining obligations of $16.7B, over five years of service revenue (C25); Venture Global's master agreement tying equipment supply to long-term service (C23); record Gas Technology Services upgrade orders on Cheniere's fleet (C24).
against this
- The aeroderivative engines at the core of many packages come from GE Aerospace through a 50/50 joint venture with GE Vernova (C27), so part of the switching cost belongs to the engine maker, not to Baker Hughes.
- Service growth is guided to level off in the second half of 2026 as catch-up on an overdue backlog fades (C04), and independent overhaul shops compete for older frames; the base is sticky but not a monopoly.
What would change our view
- Neutral→AttractiveThe multiple falls toward rivals' while IET margins hold
It needs all of:
- ○The shares fall until buyers pay about what they pay oilfield rivals for each dollar of profit.about ≈$44.76 today, 23% below the last close
- ○At the same time, the equipment business keeps at least 20 cents of each sales dollar in the next results.checked at the next results, due by 28 Feb
- Neutral→AttractiveThe business grows into the price: IET margins rise and Chart recovers
It needs all of:
- ○The equipment business keeps more than 22 cents of each sales dollar in a quarter.checked at the next results, due by 28 Feb
- ○Chart keeps more than 20 cents of each sales dollar in a quarter, up from about 17.checked at the next results, due by 28 Feb
We would also be wrong if
- Equipment orders fall below $12B over four quarters as LNG and power awards dry up.
- Debt is still more than twice yearly profit at the end of 2027.
- GE Vernova ends or narrows the turbine licence or the engine venture.
What is coming
- December 2026 Waygate sale to Hexagon closes: Whether about $1.45B of cash arrives on time to start cutting the roughly $14B of net debt toward the 1.0 to 1.5 times target.
Every dated event ahead
- December 2026 Waygate sale to Hexagon closes: Whether about $1.45B of cash arrives on time to start cutting the roughly $14B of net debt toward the 1.0 to 1.5 times target.
- January 2027 Q4 and full-year 2026 results and 2027 guidance: Whether 2026 lands inside the $4.875B to $5.475B EBITDA guide on one heavy Chart quarter, and whether IET order pricing shows up in the 2027 margin outlook.
Since we wrote this
Written
27 Sep
Price the thesis read
$57.83
25 Sep
- 28 OctEarningsOrders beat, equipment margin 19.7%; call lifts order target; view holdsEquipment margin slipped under 20% while orders and Chart cleared their marks; management said 2027 margin gains come mostly in 2028, so the price still asks too much.
- 27 OctEarningsOrders and Chart beat marks; IET margin slipped to 19.7%, under 20%. View heldQ3 2026 results, and a 1.1 GW data-centre power order.
- 15 OctNewsVenture Global's power frame agreement is mostly non-binding; first order expected by end-2026. View heldVenture Global signs power frame agreements with GE Vernova and Baker Hughes.
- 11 OctThesis reviewThe data-centre power line lifted out and priced as a betThe owner's rule of 2026-10-11: every thesis names the lines its story rides, and an early line owes a bet that cannot be declined.
- 6 OctNewsBaker Hughes signs two Venezuela gas agreements, with no value or timeline given. View heldBaker Hughes signs two Venezuela gas and energy agreements.
- 5 OctThesis reviewThe long case now sits under the verdictAfter the five-name pilot, the owner asked for the long case on every thesis.
- 4 OctThesis reviewOwner's checklist: revenue streams, cost of growth, management, catalystsThe owner's checklist found the method silent on who runs the company, what growth costs, where the money comes from and what is dated ahead; this pass fills those four blocks from the proxy and filings.
- 27 SepThesis writtenNeutral, medium convictionTwo months after the Chart purchase closed and days after Chart's first guidance sent the shares down 6.7%.
Also checked 1 time with nothing new to act on.
Sources 26
Where this came from
Sources - 26
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
- S01primarycompany filing2026-02-05Item 1 segments, product lines and named competitors; the GE Vernova supply, licence and joint-venture agreements; orders and RPO by segment; 2025 segment revenue and EBITDA; the valuation-allowance reversals in 2024 and 2025; receivables by country; buybacks and authorisationbacksC01C02C03C05C18C21C25C27C29C30C36C38C42C45C49C50
- S02primarycompany release2026-01-25record 2025 free cash flow of $2.7B, IET orders of $14.9B above the guided range, and the January 2026 outlook of similar organic IET orders in 2026backsC40
- S03primarycompany release2026-07-26orders, RPO by product line, segment revenue and EBITDA, OFSE by region, the GAAP-to-adjusted reconciliations, balance sheet, cash flow, share count and the quarter's named awards (Venture Global, Cheniere, Golar, Dynamis, Kodiak)backsC02C03C05C13C15C18C20C22C24C25C38C41C53
- S04primarycompany filing2026-07-27the debt table and the $6.5B plus EUR 3.0B notes offering, the $2.0B of July term loans, the Chart acquisition at an enterprise value of about $13.6B, the SPC joint venture and the Waygate held-for-sale reclassificationbacksC09C13C50C51C52
- S05primarytranscript2026-07-27management's answers on Power Systems capacity, the order-to-revenue lag, backlog pricing and the Middle East; questions from J.P. Morgan, Piper Sandler, Wells Fargo, Evercore and others. FMP served no speaker roles, so the analysts are read from the handoffs
given longer GTE cycle times, we expect these orders to convert to revenue at a more measured pace with a meaningful portion of the GTE order mix extending beyond 2027
backsC04C06C07C08C12C22C24C40C53C54 - S06primarycompany release2026-07-16the close, Chart's $4.3B of 2025 revenue, the $325M cost-synergy target and the 1.0 to 1.5 times net leverage target within 24 monthsbacksC09C12C15
- S07primarycompany release2026-09-09updated 2026 guidance including Chart, Chart's second-half 2026 revenue and EBITDA guide, the 22% to 23% Chart margin target for the second half of 2028, $35M of synergies executed, and free cash flow conversion of 40% to 45%backsC04C12C15C16C39C53
- S08primarycompany filing2026-03-02Chart Industries, Inc. audited consolidated financial statements for 2025, filed by Baker Hughes (8-K Ex-99.1) Chart Industries, Inc.Chart's 2025 sales, gross profit, the $266.0M termination fee expense, amortisation, operating income, depreciation and amortisation, and debtbacksC10
- S09secondaryvendor data2026-09-27Portfolio-management research pack (market tier, filed statement series, filed-competitor cohort)content/BKR/research-pack.jsonprice and returns to the 2026-09-25 close, the price-move decomposition, the analyst split and its series, the earnings-beat history, FINRA short interest, and the six-member filed cohort's multiplesbacksC17C18C19C20C37C39C40C42C44
- S10primarycompany filing2026-09-2719 open-market sales, 18 of them under a Rule 10b5-1 plan, and no open-market purchasebacksC37
- S11primarycompany filing2026-03-02Venture Global, Inc. Form 10-K for the fiscal year ended December 31, 2025 Venture Global, Inc.a customer's own description of the Baker Hughes Master Agreement - supply, pricing, reserved manufacturing capacity and long-term service - and its project table in trains and mtpabacksC23
- S12primarycompany filing2026-07-22GE Vernova Inc. Form 10-K for 2025 and Form 10-Q for the quarter ended June 30, 2026 GE Vernova Inc.Gas Power's product range and buyers, Power segment revenue of $5,477M of $11,141M in Q2 2026, and its named Power competitorsbacksC28
- S13primarycompany filing2026-02-13reciprocating engines and generator sets, and Solar Turbines, sold under intense price competitionbacksC29
- S14primarycompany filing2026-02-19the same well-life-cycle and subsea products described by the rivals Baker Hughes namesbacksC30
- S15primarycompany filing2026-02-27Chart Industries, Inc. Form 10-K for the fiscal year ended December 31, 2025 Chart Industries, Inc.Chart's own competition section: regional and product-specific rivals, and suppliers owned by the industrial-gas producers that are also its customers; Heat Transfer Systems at 29.0% of 2025 salesbacksC31
- S16primaryindustry data2026-01International Energy Agency, Gas Market Report, Q1-2026 International Energy Agencythe liquefaction capacity sanctioned in 2025, measured by an agency with no equipment to sell
Over 90 bcm/yr of new LNG liquefaction capacity was sanctioned in 2025, making it the second strongest year on record for liquefaction FIDs. In the United States alone more than 80 bcm/yr of LNG liquefaction capacity reached FID - an all-time high for the US gas industry.
backsC32 - S17primaryindustry data2026-04International Energy Agency, Gas Market Report, Q2-2026 International Energy Agencythe Qatar damage (two trains, 17.5 bcm/yr, three to five years to repair) and the delay to the LNG supply wave
The Middle East conflict has already caused the loss of around 120 bcm of cumulative LNG supply for the period 2026-2030 when considering the combined effect of the near-term supply disruptions and the medium-term implications for supply.
backsC33 - S18primarygovernment data2026-09-01US Energy Information Administration, Today in Energy: U.S. LNG exports rose 23% in the first half of 2026 US Energy Information Administrationthe rate at which new US liquefaction is actually exporting
U.S. liquefied natural gas (LNG) exports averaged 17.4 billion cubic feet per day (Bcf/d) in the first six months of the year, 23% more than the same period in 2025
backsC34 - S19primarygovernment data2026-01-13US Energy Information Administration, press release: EIA forecasts strongest four-year growth in U.S. electricity demand since 2000 US Energy Information Administrationthe electricity demand rate behind behind-the-meter gas power, measured by the statistical agency
EIA expects U.S. electricity use to grow by 1% this year and 3% in 2027. This increase would mark the first time since 2007 that power demand has risen for four years in a row
backsC35 - S20tertiarynews2026-09-10the objection stated on the day of the fall; a pointer to the Barclays presentation (S07), which is the primary record
Baker Hughes shares fell 6.5% after CEO Lorenzo Simonelli disclosed at the Barclays conference that the Chart Industries acquisition would create near-term headwinds.
backsC39 - S21primarycompany filing2026-02-25the Engineering segment at about 10% of 2025 sales - the equipment arm of an industrial-gas producer that is also a buyer of cryogenic equipmentbacksC31
- S22primarycompany filing2026-03-30beneficial ownership as of March 23, 2026, the directors' and officers' careers, the 2025 bonus goals and results, the 2025 PSU designbacksC46C47C48
- S23primarycompany release2026-09-28the Q3 2026 release date (October 27, after the close) and webcast (October 28)
Baker Hughes (NASDAQ: BKR) will announce the results of the third quarter ending Sept. 30, 2026, via press release at 5 p.m. Eastern Time (4 p.m. Central Time) on Tuesday, Oct. 27, 2026.
read, but no claim rests on it - S24primarycompany filing2026-10-04revenue, R&D, SG&A, stock pay and capital spending for FY2021 to FY2025 and the four quarters to June 2026backsC50
- S25primarycompany filing2026-10-27Q3 2026 orders, remaining obligations, segment revenue and EBITDA, Chart's first part-quarter and free cash flowbacksC12C55
- S26primarytranscript2026-10-28Q3 2026 earnings call transcript (FMP), held 2026-10-28data/cache/transcripts/BKR-2026Q3.jsonManagement's answers on the Horizon 2 order target, 2027 shape by segment, backlog quality, Chart's margin path and the Middle East
book to bill, we expect it to remain above 1x. And revenue growth and EBITDA margin expansion for the company.
backsC12C51C56