Wolfe Research launched coverage of three major oilfield services companies, issuing Outperform recommendations on SLB and Baker Hughes and a Peer Perform on Halliburton. In the note, analyst Carlos Escalante described the sector as facing "a selective capital cycle favoring international exposure."
On SLB, Wolfe assigned a $62 price target and described the company as "best positioned for a selective capital cycle." The firm cited margin expansion potential tied to the integration of ChampionX and growth in SLB's digital and data center operations. Those digital and data center revenues doubled from fiscal 2024 to 2025, and Wolfe expects that segment to grow at an annual rate of 13-15% over the next decade.
Escalante also flagged valuation divergence, noting that SLB's mid-cycle EV/EBITDA of 8.0 times represents "an unreasonable discount vs peers closer to 9.0x." That gap is presented as an argument for the company's relative attractiveness under Wolfe's coverage framework.
Baker Hughes received the most bullish initiation among the trio, with Wolfe assigning a $70 price target. The research team argued that Baker Hughes' free cash flow path is currently "being mispriced at an OFS multiple." A central element of Baker Hughes' thesis is the rising contribution from its Industrial and Energy Technology business, which Wolfe expects to exceed 50% of EBITDA for the first time.
Wolfe also identified the proposed $13.6 billion acquisition of Chart Industries as a material catalyst for Baker Hughes, noting that the deal - which is awaiting EU regulatory approval - will "further accelerate revenue diversification." The firm added that the transaction would bring an expanded long-term project backlog across areas including LNG, power, data centers and industrial decarbonization.
By contrast, Wolfe gave Halliburton a Peer Perform rating and indicated that potential outperformance is "largely macro dependent." The note states that Halliburton would need either renewed pricing power or convincing signs of a capital expenditure upcycle to drive above-peer returns, conditions that Wolfe says have not yet appeared.
Escalante underscored Halliburton's heavy exposure to North America, writing that HAL "carries the largest North America exposure of the large-cap OFS group," and that free cash flow growth for the company is therefore "inextricably tied to domestic activity."
Implications for markets and sectors
- Oilfield services companies with stronger international footprints and diversified businesses may attract greater investor preference under the selective capital cycle Wolfe describes.
- Valuation spreads within the sector - exemplified by SLB and its peer EV/EBITDA comparisons - could influence relative performance among large-cap OFS names.
- Mergers and acquisitions that expand exposure to LNG, power, data centers and decarbonization projects can materially alter company revenue mixes and investor expectations.
Bottom line
Wolfe Research's initiations present a differentiated view across three large oilfield services firms: a bullish stance on SLB and Baker Hughes driven by structural and transactional catalysts, and a cautious, macro-dependent view on Halliburton tied to North American activity. The firm's analysis centers on international exposure, business diversification, and valuation discrepancies as decisive factors in this selective capital cycle.