Following continued chatter regarding the General Electric Company
Baker Hughes' Competitive Edge
Argus sees competitive edge and a rising price target for Baker Hughes.
Argus also narrowed its loss per share estimate for Baker Hughes, reflecting the third-quarter results, and raised its 2017 bottom-line estimates. The firm reaffirmed its Buy rating on the shares of the company and raised its price target by $9 to $65.
5-Point Short Story
Bernstein encapsulated the deal through a five-point "short story."
Bernstein rates GE a Market Perform, with a $33 price target.
RBC is of the opinion that the increased scale and stability of the new Baker Hughes afforded through the transaction increases its competitive position and further aligns it with its vision of shifting its focus to products and technology and away from fully integrated services.
RBC rates Baker Hughes an Outperform with a $61 price target.
GE-Baker Hughes Deal Engenders Digital Industrial Company
Credit Suisse sees a digital industrial company emerging in the oilfield services space in the wake of the proposal of marriage between GE's Oil & Gas business and Baker Hughes. The firm believes cost synergies and oil price outlook assumptions are very conservative.
Credit Suisse has a $61 price target for Baker Hughes compared to its $66 preliminary valuation for the company in the deal.
However, some analysts didn't exactly go overboard over the deal and offered muted opinion.
Deal's Economics Disappoints
Though convinced with the industrial logic of the transaction, Barclays believes the negative reaction to Baker Hughes stock price on Monday was due to Baker Hughes giving up too much economics. Given the integration and execution risk, the firm believes the new company's 2020 EBITDA guidance isn't compelling.
U.S. Onshore Markets: Long-Cycle Exposure At Near Term's Expense
CLSA does not see the deal as a consolidation exercise but penetration of existing markets with more touch points, content and pull through. However, the firm sees more long-cycle exposure at the expense of some of the near-term momentum of the U.S. onshore markets, dissuading some near-term investors. That said, the firm believes the deal has facilitated the creation of an entity with a more compelling opportunity set managed with increased discipline and process.
At last check, GE shares were down 1.15 percent at $28.76, while Baker Hughes was down 0.87 percent at $54.92.
|Nov 2016||Atlantic Equities||Upgrades||Underweight||Neutral|
|Nov 2016||Raymond James||Downgrades||Strong Buy||Outperform|
|Oct 2016||Goldman Sachs||Terminates||Neutral|
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