Telkom Stock Gains Momentum as Earnings Rise 16.4% and Key Trendline Holds
Telkom stock steadies as earnings rise 16.4% and key trendline support holds. Updated analysis shows upside toward 5,145 and 5,391 if buyers
Quick overview
- Telkom SA opened with mild downside pressure amid geopolitical tensions following the U.S. decision regarding the 2026 G20 summit.
- Analysts warn that sustained geopolitical tensions may impact foreign investor confidence, affecting local equities like Telkom.
- Despite external challenges, Telkom reported a 3.4% YoY revenue increase and strong financial metrics, including a 16.4% rise in headline earnings.
- Technical analysis shows Telkom is stabilizing near key support levels, with potential upside if it reclaims the 20-EMA.
Telkom SA SOC Ltd (JSE: TKG) opened Friday with mild downside pressure as broader South African markets reacted to renewed geopolitical noise. U.S. President Donald Trump’s announcement that South Africa won’t be invited to the 2026 G20 summit added a layer of uncertainty, especially after Washington’s boycott of last week’s Johannesburg event.
While the impact isn’t direct, analysts warn that sustained tensions may weigh on foreign investor confidence, a factor that often filters into local equities such as Telkom.
Rand movements remained stable through the session, giving the equity market space to digest the political headlines without aggressive volatility.
Inflation Watch and Domestic Market Drivers
Investors are tracking South Africa’s October producer inflation numbers, expected to climb to 3.1% YoY, up from 2.3% in September. The projected rise is driven by higher fuel costs, elevated food prices, and broader supply-side pressures.
Higher producer inflation tends to lift operating expenses for companies like Telkom. Other key indicators due Friday, credit data, trade figures, and the national budget update, will help shape sentiment heading into December.
Meanwhile, the benchmark 2035 government bond yield held steady at 8.572%, signaling no immediate shift in fixed-income risk appetite.
Telkom’s Financial Strength Supports Stability
Despite external headwinds, Telkom’s latest results paint a picture of resilience. The company reported:
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Revenue: +3.4% YoY, driven by data-led offerings
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EBITDA margin: 26.4%, up from 25.3%
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Free cash flow: ZAR 724 million
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Mobile subscribers: Over 75% of total base
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Capex: +12.9% YoY, focused on fibre and mobile
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Headline earnings: +16.4%; basic EPS: +12.7%
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Cash: ZAR 5.6 billion, net-debt-to-EBITDA at 0.7x
Telkom also marked 12 straight quarters of service-revenue growth, underscoring its strong operational footing even as competition in mobile pricing remains intense.
Telkom Technical Analysis: Telkom Holds Key Trendline Support
Telkom is attempting to stabilize on the 4H chart after pulling back from the 5,391 resistance area. Price continues to respect the rising trendline that has guided the recovery since mid-November, showing buyers are protecting higher lows.
The 20-EMA at 5,034 remains a key pivot. Price sits just below it—showing hesitation, not reversal. If Telkom reclaims the EMA, the next upside levels are 5,145 and a retest of 5,391.
RSI near 44 indicates neutral momentum, leaving room for either direction. A breakdown below 4,827 would weaken the structure and expose 4,613 as the next demand zone.
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