Baker Hughes (BKR) is likely to post Q3 results slightly ahead of expectations because Middle East activity is running stronger than its guidance assumed and gas technology revenue is growing, UBS said in a note emailed Wednesday.

UBS said the company had assumed flat Middle East activity from Q2, but activity picked up, even after some recent sector-wide negative effects. UBS also cited the absence of hurricanes as support for oilfield services and equipment revenue, potentially bringing slight margin pressure in oilfield services.

The brokerage cut its 2027 and 2028 revenue forecasts to reflect a lower starting point for GTLS, whose guidance came in below expectations, largely on margins.

UBS said Baker Hughes outlined a clear path to integrate the business through cost synergies and commercial improvements, and it expects GTLS margins to expand over the next two years.

UBS kept its neutral rating on the stock and lowered the price target to $69 from $72.

Price: 55.12, Change: -0.81, Percent Change: -1.44