Baker Hughes' (BKR) industrial and energy technology segment is expected to be its main growth engine, supported by strong project flow, record orders and rising power demand, Morgan Stanley said Friday in a report.

The segment recently topped its objective of 20% EBITDA margin, boosting confidence that "continued growth can translate into attractive incremental profitability," the report said.

Baker Hughes' oilfield services and equipment portfolio mix carries a more "durable" earnings profile than peers, Morgan Stanley said. The business is weighted toward natural gas, international land and offshore activity, as well as production optimization, supporting higher growth prospects, the report said.

Morgan Stanley resumed coverage of Baker Hughes with an overweight rating and top pick and a $70 price target.

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