ChampionX Earnings: Seasonal Impacts Should Reverse Later in 2024; SLB Deal Remains Good Outcome

ChampionX delivered solid first-quarter results, with total revenue reaching $922 million, the midpoint of management’s guidance, and firmwide adjusted EBITDA of $192 million exceeding the high end of the guidance range by approximately $3 million. Most segments saw sequential revenue growth, driven by higher sales volume of select products and overall higher demand in North America. However, this was offset by revenue contraction in the production chemical technologies segment (65% of total revenue) due to seasonal declines internationally. Weaker global end-market demand at this time of the year is typical, and we expect activity to pick back up in the warmer months. Our $46 fair value estimate and no-moat rating for ChampionX are unchanged, as is our $62 fair value estimate for SLB.