BP is set to report an EPS of $1.66 on revenue of $55.7bn tomorrow. A positive report may lead to a re-test of the key resistance level at ?4.92.

Overview 

BP plc is a British global oil and gas company headquartered in London, England. It is one of the oil and gas supermajors and one of the world's leading corporations in terms of revenue and profit. It is a vertically integrated firm that manages in all aspects of the oil and gas sector, including exploration and extraction, refining, marketing and distribution, power generating, and trading.

Financials 

Taking a look at BP’s income statement, the oil giant reported a sum of $164bn in revenue and $44bn in gross profit in the 2021 financial year. That is a 50% increase in revenue and a 36% increase in gross year-on-year, which resulted in a net profit of $7.5bn for the year compared to a net of $-20.7bn in the previous year. Highlighting a significantly major improvement. Additionally, EBITDA came in at $32bn versus $-6.8bn in 2020, so overall the earnings per share came in at a positive figure of $2.25. In 2020 the EPS was reported at $-6.03 and in 2019 it was $1.19, again demonstrating the financial improvements BP has made over the past couple of years despite the knocks from Covid and recession fears. Over to the balance sheet, its cash-on-hand remains strong with a small increase of $2bn and its total assets rose by $20bn. Whereas total liabilities rose by $14.8bn. As the rise in assets overpowered the rise in liabilities, the equity grew steadily by $5bn YoY. 

Technicals

BP’s share price currently sits around £4.83 a share. From a technical aspect, we can see that a slight formation of an ascending triangle might be in play with a support along the ascending trendline at £4.78. A break below this trendline could see the stock test support levels at £4.77 then at £4.72 then at £4.68. On the other hand, towards the upside, resistance sits at £4.85 then at £4.87 then at £4.89. A break above £4.89 could see the price rise further towards £4.92 then a major point at £4.96, where the resistance was tested on 3 different occasions already (upper horizontal trendline). Technical indicators are currently mixed as MACD is negative on the 4-hour interval, but RSI is neutral as it reads 48. 

Summary 

To summarise, on the basis of the financials, BP is almost at the level they were back in 2018. Perhaps not regarding the revenue but certainly the profit and earnings. They are actually now operating at a much better profit to revenue margin than before. Their cash-on-hand is the highest it’s ever been ($36bn) and they are showing greater improvements with lower expenses, which has resulted in much better earnings in 2021. Looking at the technical, they are currently mixed but the bias is predominantly still bullish as we can see a formation of a slight ascending triangle. Key resistance sits at £4.92 and there is a chance for a re-test over the next couple of days as BP is set to release its earnings report. Last week, its competitor Shell seen its price surge after smashing its earnings, if BP was to follow in the same path tomorrow, the price of its stock may move higher. BP is expected to report earnings of $1.66 on revenue of $55.7bn. Important to note, a negative report could see the price fall and vice-versa.