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Strength Seen in ChampionX (CHX): Can Its 8.1% Jump Turn into More Strength?

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ChampionX (CHX - Free Report) shares ended the last trading session 8.1% higher at $24.43. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 31.5% gain over the past four weeks.

The energy market rebound in the past few months and the resulting improvement in activities has enabled ChampionX in increasing prices for customers in its Chemical Technologies segment. This primarily drove the stock higher. The recovery in crude prices to around $65 a barrel has pushed drilling demand higher and contributed to the strength in ChampionX, which provides equipment and technologies to the oil producers. Further, an improving macro environment for energy prompted Piper Sandler analyst Iam Macpherson to raise the price target on the oilfield service provider earlier this month.

This oil and gas drilling technology company is expected to post quarterly earnings of $0.06 per share in its upcoming report, which represents a year-over-year change of +50%. Revenues are expected to be $671.37 million, up 156.8% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For ChampionX, the consensus EPS estimate for the quarter has been revised 28% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on CHX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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