Baker Hughes Stock Slides on Lowered Margin, Cash Flow Outlook for Chart Industries Acquisition

Shares of Baker Hughes (NASDAQ: BKR) declined by 7.0% in afternoon trading after the company's presentation at the Barclays Energy-Power Conference revealed a weaker-than-expected near-term outlook for its recently acquired Chart Industries business.

Guidance Disappoints Investors

During the conference on September 9, Baker Hughes management provided details that concerned investors, even as it raised its overall full-year financial forecasts. The company now expects full-year 2026 revenue between $28.50 billion and $30.30 billion and adjusted EBITDA of $4.88 billion to $5.48 billion.

However, the market focused on the less favorable metrics associated with the $13.6 billion acquisition of Chart Industries:

• Lower Margins: Margins from the Chart Industries segment are projected to be approximately 17% in the second half of 2026, a figure that tracked below analyst consensus.
• Reduced Cash Flow: Full-year guidance for free cash flow conversion was lowered to a range of 40–45%. Management attributed the entire reduction to costs associated with the acquisition.

Ad

Market and Analyst Reaction

The revised guidance prompted a negative reaction from both investors and analysts. The stock traded as low as $59.07 intraday, a significant drop from its previous close of $63.64.

In response to the news, UBS lowered its price target on Baker Hughes to $70 from $71, maintaining a Neutral rating. The bank cited integration costs and near-term margin pressure as key concerns. While Susquehanna offered a more bullish view, raising its target to $75 with a Positive rating, it was not enough to offset the negative sentiment.

The sell-off was amplified by a weak broader market, with the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all trading lower during the session. This macro headwind added to the company-specific pressure, as investors recalibrated their expectations for the profitability and pace of the Chart Industries integration.