- Baker Hughes (BHI +2.5%) shares shook off early losses and have since racked up solid gains despite reporting worse than expected Q1 earnings.
- Citi’s Scott Gruber reiterates a Buy rating and $53 price target, saying Q1 results should have only a modestly negative impact given the potential restructuring to come following the likely end of Halliburton’s (HAL +2.1%) pursuit of the company; Gruber continues to like BHI’s balance sheet, restructuring potential, share buyback potential and take-out potential.
- BHI says the terms of the merger agreement required it to retain certain expenses, which limited its ability to cut costs in Q1 and hurt operating margins, costs which Cowen analysts note would go away soon if the merger deal breaks.
- Stephens analyst Matthew Marietta is more cautious, putting his Overweight rating and price target under review.