Research · Sep 3, 2026
[BKR] Baker Hughes Thesis 2026: LNG Capex Super-Cycle Drives IET Energy Technology Boom
Baker Hughes Company (NASDAQ: BKR) FY2025 revenue ~$28-29B (+5-8%) with adj. EPS ~$2.50-3.00 reflecting continued post-2024 LNG capex super-cycle catalyst (~$200B+ global LNG project FIDs 2024-2026 driving IET turbine + compressor demand) + selected Industrial & Energy Technology +10-15% growth ($11B segment) + selected Oilfield Services & Equipment oil cycle stability ($17B segment) + selected ~10-year continuous dividend track post-2017 merger under continued CEO Lorenzo Simonelli. Leading global energy technology firm focused on oilfield services + oilfield equipment + industrial energy technology including selected LNG turbines + compressors. Founded 1907 as Hughes Tool Company by Howard Hughes Sr. (~118-year heritage; selected initial focus on selected drilling tools + drill bits); selected various rebrands through history including 1987 Baker International + Hughes Tool Co. merger forming Baker Hughes; current Baker Hughes structure formed July 2017 via merger of GE Oil & Gas + Baker Hughes (selected post-2017 BHGE then rebranded Baker Hughes 2019 post-GE divestiture). Headquartered in Houston Texas; ~58,000+ employees globally with ~$28-29B revenue. Two reporting segments: Oilfield Services & Equipment (OFSE) ~60% revenue ($17B — wireline services ~$3B+ + drilling services + drilling fluids ~$5B+ + production chemicals + completion fluids ~$3B+ + upstream oilfield services for major oil + gas operators; ~50%+ international revenue), Industrial & Energy Technology (IET) ~40% ($11B — gas turbines + LNG compressors + industrial energy technology; ~30-40% global LNG turbine + compressor market share via post-2017 GE Oil & Gas legacy Frame 7 + Frame 9 turbines; ~50%+ aftermarket service recurring revenue). LNG capex super-cycle: post-2024 ~$200B+ global LNG project FIDs 2024-2026 includes QatarEnergy North Field East + South ~$30B + US LNG export projects (Plaquemines + Rio Grande + Cameron LNG expansion + Texas LNG) + Mozambique TotalEnergies LNG + Australian LNG (Pluto Train 2 + Scarborough) + Eastern Mediterranean LNG; major LNG operator customers QatarEnergy + ExxonMobil + Chevron + TotalEnergies + Shell + Sempra + Cheniere; ~$2-3B+ FY2025 IET LNG bookings + multi-year backlog supporting 2026-2030 revenue visibility; FY2026 catalyst: continued IET bookings + ~$15B+ IET backlog. CEO Lorenzo Simonelli since July 2017 (~8-year tenure post-merger; ex-GE Oil & Gas CEO 2013-2017 + ex-various GE roles 1994-2013 + ~25-year GE career; Italian; ex-GE Healthcare + ex-GE Transportation). Capital return: ~$0.80-0.85 annual dividend FY2025 (~$0.20-0.21/quarter; ~10+ consecutive year continuous track post-2017 merger); $1-2B buyback program FY2025 (aggressive post-2024 capital return on $4-5B+ FCF generation); investment-grade Baa1/BBB+ credit ratings; FCF $2.5-3.5B. FY2026 thesis: IET LNG super-cycle continuation + OFSE oil cycle stability + ~11-year dividend track + capital return acceleration. Risks: LNG capex deceleration, major oil price decline, Siemens Energy + MAN competitive substitution, major LNG operator project delays.