BHGE - Baker Hughes: GE Acquisition Will Continue To Have Negative Effects Long Term
Baker Hughes, A GE Company (BHGE) is approximately fairly valued on an absolute basis, but relative to other major oilfield services and equipment companies is overvalued. BHGE’s presence across the oil and gas industry value chain greatly reduces the volatility of profit margins, which has protected the company somewhat during the downturn, but will cause it to underperform when capital expenditure expands. Additionally, there was no compelling business logic behind General Electric’s (GE) acquisition of Baker Hughes, and management and cultural issues are likely to contribute to the stock underperforming in