By: Jon Costello
This is the second part of my deep dive into the international oilfield services sector, which had been underway before the recent selloff. My first part, on SLB (SLB) can be found here. I want to know whether these companies might be attractive long-term investments amid a bullish longer-term setup for oil prices and the ongoing maturation of U.S. shale production.
This article looks at Baker Hughes (BKR). Like SLB, the shares have traded above intrinsic value but could be an attractive buy at a low enough price.
Overview
BKR traces its present form to 2017, when it combined its legacy oil and gas service business with GE’s energy turbomachinery segment. Today, it is effectively two businesses operating as one, and the value of the whole depends on the economics of both.
The company has been pivoting away from its lower-margin oil and gas services business and toward LNG and power systems, reshaping its asset portfolio over the past few years. Since mid-2025, it has divested four businesses and acquired Chart Industries, a manufacturer of technology and equipment for the energy, industrial gas, and decarbonization markets. After the acquisition closed on July 16, it is divesting certain Chart subsidiaries to meet European antitrust regulations.
BKR’s pivot provides a way to sustainably boost margins and return on capital, while expanding into growth markets. However, the improvements such a pivot is likely to bring to the company’s financials is largely reflected in the current stock price.