Baker Hughes's Perspective in Q2 2026: KEY Takeaways

Power Business: Growth & Potential

We have already discussed Baker Hughes's (BKR) Q2 2026 financial performance in our recent article. Here is an outline of its strategies and outlook. Baker Hughes continues to see strong long-term demand for its Power Systems business. The company is expanding gas turbine and generator capacity, which could support nearly $5 billion in annual Power Systems revenue by 2029. During Q2, Baker Hughes booked $2.6 billion of Power Systems orders, including 2.7 GW of power generation capacity. 

Its management highlighted major data center-related awards from Dynamis and Kodiak Gas Services, strengthening its North American power generation business. The company believes AI infrastructure investment will drive a multiyear expansion in power demand and generation capacity. It also expects growing opportunities in natural gas infrastructure, grid modernization, energy management, and carbon capture. Management estimates its Power Systems addressable market could reach approximately $100 billion by 2030, with most opportunities tied to behind-the-meter power solutions.

LNG & Gas Market Outlook 

Baker Hughes booked $1.8 billion of LNG equipment orders across three major projects during the quarter. The company secured significant LNG awards from Venture Global, Golar, and Cheniere, strengthening its leadership in global LNG infrastructure. It expects global LNG capacity to approach 800 MTPA by 2030 and 950 MTPA by 2035, supported by energy security and rising natural gas demand. 

The company also won major gas processing awards for Middle East offshore projects and Aramco's Uthmaniyah development. Management believes its compression technologies will play a critical role in expanding global gas infrastructure. These projects reinforce Baker Hughes' long-term growth outlook across LNG, gas processing, and energy infrastructure.

OFSE Projects and Chart Acquisition Benefits

In the oilfield services business, Baker Hughes secured major well construction, drilling, and intervention contracts with Petrobras and Equinor in Q2. The company also expanded its subsea footprint with new manufacturing capacity in Norway and key subsea awards in Angola and Brunei.

The Chart acquisition (completed in July 2026) expands Baker Hughes' capabilities across data centers, CCUS (carbon capture, utilization, and storage), geothermal, industrial, and cryogenic solutions. It also creates significant cross-selling and higher-margin aftermarket service opportunities through the combined installed base. Management continues to target $325 million of annualized cost synergies by the third year after closing. 

Q3 & FY2026 Outlook

BKR expects Q3 company revenue to increase about 2% sequentially, driven by modest growth in both IET and OFSE. OFSE revenue is expected to rise about 3%, while OFSE EBITDA improves by a similar rate on stronger activity and backlog execution. 

IET revenue is expected to increase about 1%, although company-wide EBITDA is projected to decline about 2% due to logistics and inflationary pressures. Baker Hughes also raised its FY2026 revenue, EBITDA, and IET orders guidance, reflecting continued confidence in its long-term growth outlook.

Relative Valuation

Baker Hughes is currently trading at an EV/EBITDA multiple of 13.2x. Based on sell-side analysts' EBITDA estimates, the forward EV/EBITDA multiple is lower. The current multiple is higher than its five-year average EV/EBITDA multiple of 10.8x.

BKR's forward EV/EBITDA multiple versus the current EV/EBITDA is expected to contract more steeply than its peers because the company's EBITDA is expected to increase more sharply than its peers in the next four quarters. This typically results in a higher EV/EBITDA multiple than peers. The stock's EV/EBITDA multiple is higher than its peers' (HAL, SLB, and FTI) average. So, the stock appears reasonably valued compared to its peers.

Final Commentary

Baker Hughes continues to position itself as a leading provider of power infrastructure. The company is expanding its addressable market through data center power, LNG infrastructure, and the Chart acquisition, while strengthening its global OFSE franchise with new project awards. Management expects the Chart acquisition to yield $325 million of annual cost synergies. For Q3, Baker Hughes expects modest sequential growth across its core businesses. The company also raised its FY2026 guidance, reflecting confidence in its order backlog and long-term earnings growth. The stock appears reasonably valued compared to its peers.