Baker Hughes Company (BKR - Free Report) is planning to expand its presence beyond oil and gas field services since upstream players around the world are transitioning to low carbon footprint, as said by Lorenzo Simonelli – the company’s Chairman and CEO.
Energy majors are under pressure from investors to lower carbon emissions. With renewables being the fastest-growing energy source in the global market, many of the big oil energy firms are increasing the weightage of clean energy in their portfolio. Thus, with growth in renewable energy like wind and solar, there has been a decline in demand for oilfield services.
To capitalize on clean energy’s growing trend, Baker Hughes is divesting oilfield assets and is putting more emphasis on investing in technologies that will help customers to lower emissions. Notably, the oilfield service player targets to become a net-zero emissions company by 2050.
Baker Hughes is well positioned to gain since it can deliver proprietary post-combustion carbon capture solutions. At a large scale, the company designs and executes integrated carbon capture, use, and storage developments, helping its customers to achieve their carbon reduction targets.
Simonelli said that with big oil firms set for energy transition, Baker Hughes will emphasize on cost-cutting measures at its oilfield services and oilfield equipment businesses. Importantly, Simonelli is not foreseeing massive recovery in the company’s oilfield equipment business next year.
Based in Houston, TX, Baker Hughes currently carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space are Pioneer Natural Resources Company (PXD - Free Report) , Concho Resources Inc. (CXO - Free Report) and EOG Resources, Inc. (EOG - Free Report) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Pioneer Natural has seen upward earnings estimate revisions for 2020 in the past 30 days.
Concho is likely to see earnings growth of 21.6% in 2020.
EOG Resources’ 2020 bottom-line estimates have risen more than 200% over the past 30 days.
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