General Electric, Baker Hughes Prep for Analyst Day

Shares of Baker Hughes (BHI) were lower on Wednesday ahead of its joint analyst day with General Electric. At the end of October, the two companies entered into an agreement to combine GE's oil and gas business and Baker Hughes to create the "new" Baker Hughes. The new company is expected to have $32 billion of combined revenue. RBC Capital Markets says the analyst day will cover the pro forma company profile, along with long-term targets. The firm expects management to reaffirm the goal for $1.6 billion of cost synergies, while also providing details on the potential for tax savings for GE, which were valued at approximately $1 billion. Meanwhile, BMO Capital Markets analyst Daniel Boyd expects the analyst day to focus on qualitative issues, centered on Baker Hughes' ability to leverage GE's R&D budget and global footprint. He rates BHI shares at Outperform with a $68 price target. The merger is expected to close mid-2017.

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