Baker Hughes Merges With GE's Oil Business, And Promptly Gets A Sell Rating From Goldman

Merrick Weingarten

Tue, Jul 18, 2017, 8:12 AM

Following the completion of the Baker Hughes A GE Company Class A (NYSE: BHGE) and General Electric Company (NYSE: GE) Oil & Gas merger, Goldman Sachs analyst Waqar Syed has issued a Sell rating on Baker Hughes, with a $37 price target.

“We rate Baker Hughes at Sell in the context of our Attractive coverage view on Oilfield Services," the note said. "Our 12-month $37 target price implies 1% downside versus an average 54% upside for the remainder of our coverage."

3 Reasons Behind The Bearish Call

“Positive news or results about completions may cause Baker Hughes to underperform peers like Schlumberger Limited. (NYSE: SLB)/Halliburton Company (NYSE: HAL) with larger completions exposure,” Syed said.
Reduced consensus estimates
Downward revision to management guidance due to a change in the oil macro