After exploring the options for Baker Hughes (BHI) should the takeover by Halliburton (HAL) fail, JPMorgan analyst Sean Meakim concludes that a stock-for-stock merger of equals between Baker and National Oilwell Varco (NOV) "stands out as the best route to value creation over the next cycle." The potential deal, which would have to overcome "significant hurdles, could drive greater value than either company could generate on its own, Meakim argues in a research note. Halliburton is still offering the best deal for Baker, but the likelihood of successful merger appears low, the analyst contends. He sees three options for Baker should it walk away from Halliburton: stay the course, pivot to the core business, and/or find a partner. He keeps Neutral ratings on Baker and National Oilwell.

Sees Q2 adjusted EBITDA $260M-$280M.