Peet Serfontein & Motheo Tlhagale
We initiate a long position. Our upside target is set at R60.00. We recommend a stop-loss at R47.00.
Telkom is one of South Africa's most established telecommunications providers. The company has transitioned from a former state-owned fixed-line monopoly into a diversified operator competing across mobile, fibre, broadband, and enterprise Information and Communication Technology (ICT) services.
Telkom operates through divisions such as Openserve, which manages one of the country's largest fibre networks and provides wholesale connectivity, Telkom Consumer and Telkom Mobile, which continue to grow their subscriber base through competitive data offerings, and BCX, a leading provider of corporate ICT, cloud, cybersecurity, and managed network services.
Technically, a developing rectangle pattern with the price consolidating near the upper boundary signals bullish momentum (see the rectangle pattern on the main chart). Persistent tests of the resistance level and price gravitating toward the top of the range indicates strong demand and buyer control. This behaviour suggests growing pressure for an upside breakout, making the pattern a constructive base for potential continuation if broader market conditions remain supportive.
The share appears to be entering the early stages of Wave five within the Elliott Wave framework, which typically marks the final impulsive leg of a five-wave sequence. This phase often follows a stabilised Wave four correction and signals renewed upward momentum as confidence returns. Early signs suggest the corrective phase has matured, setting the stage for a potential breakout and continuation of the dominant trend.
A rising Moving Average Convergence Divergence (MACD) histogram signals fading downside momentum and weakening selling pressure, often preceding a bullish shift. As the histogram moves toward the zero line, it reflects narrowing gaps between the MACD and its signal line, suggesting sellers are losing control. Combined with a Coppock Curve forming a trough and turning higher, these developments strengthen the case for a potential upside reversal, especially when supported by stabilising On-Balance Volume (OBV) trends and constructive broader market conditions.
| Share Information | |
|---|---|
| Share Code | TKG |
| Industry | Telecommunication Services |
| Market Capital (ZAR) | 25.84 billion |
| One Year Total Return | 65.46% |
| Return Year-to-date | 51.74% |
| Current Price (ZAR) | 50.55 |
| 52 Week High (ZAR) | 60.59 |
| 52 Week Low (ZAR) | 29.30 |
| Financial Year End | March |
| The share is trading above its 200-day simple moving average (SMA) at R45.90, a key indicator of long-term bullish strength. | |
| Consensus Expectations (Bloomberg) | ||||
|---|---|---|---|---|
| FY25 | FY26E | FY27E | FY28E | |
| Headline Earnings per Share (ZAR) | 5.83 | 5.94 | 6.57 | 7.12 |
| Growth (%) | 1.82 | 10.64 | 8.33 | |
| Dividend Per Share (ZAR) | 0.00 | 1.76 | 1.94 | 2.07 |
| Growth (%) | 10.24 | 6.87 | ||
| Forward PE (times) | 8.51 | 7.69 | 7.10 | |
| Forward Dividend Yield (%) | 3.48 | 3.83 | 4.09 | |
| Medium-term growth prospects remain positive, though expectations are capped at high-single-digit growth over this period. The resumption of dividend payments in FY26 will notably improve shareholder returns. | ||||
Buy/Sell Rationale:
Technical Analysis:
Fundamental view:
| Share Name and Position | SLM SA - Buy (Continue to hold) |
HAR SA - Buy (Continue to hold) |
OUT SA - Buy (Continue to hold) |
CLS SA - Buy (Continue to hold) |
|---|---|---|---|---|
| Entry | 94.83 | 298.99 | 73.75 | 365.58 |
| Current Price | 91.55 | 292.53 | 72.23 | 348.00 |
| Movement | -3.5% | -2.2% | -2.1% | -4.8% |
| Comment | Based on its recovery pattern and improving 2025 profile, continued upside into 2026 appears favourable and remains of interest. The price is holding above the 200-day average, though fading momentum is a concern. The trade maintains a R110.00 target and a R89.00 stop-loss. | The impulsive nature of wave b remains of interest, with the price holding above the 200-day average despite emerging downside momentum. The trade maintains a R374.00 target with a R255.00 stop-loss. | A recent shift toward consecutive bullish swings remains of interest, with the price continuing to test the 200-day average as downside momentum fades. The trade maintains a R87.00 target with a R69.00 stop-loss. | The development of an Elliott Wave one structure remains of interest, with the price continuing to test the 200-day average. Downside momentum persists. The trade maintains a R413.00 target and a R347.00 stop-loss. |
| Time to exit | 24 February 2026 | 12 January 2026 | 11 December 2025 | 18 March 2026 |
| Share Name and Position | VOD SA - Buy (Continue to hold) |
ANH SA - Buy (Continue to hold) |
SHP SA - Buy (Continue to hold) |
INL SA - Stop-loss (Close the position) |
|---|---|---|---|---|
| Entry | 132.90 | 1 031.56 | 278.33 | 130.41 |
| Current Price | 137.71 | 1 079.25 | 273.99 | 121.53 |
| Movement | +3.6% | +4.6% | -1.6% | -6.8% |
| Comment | The stock will trade ex-dividend on 26 November 2025. A period of low volatility suggesting stability and potential accumulation remains of interest, with the price holding above the 200-day average as downside momentum fades. The trade maintains a R157.00 target and a R128.00 trailing stop. | The price is holding firmly within the upward-sloping linear regression channel. The price remains below the 200-day average, making this a counter-trend strategy, while fading downside momentum supports the setup. The trade maintains a R1 255.00 target with a R990.00 trailing stop. | The price development within a well-established rising channel remains of interest, despite a dip below the 200-day average and emerging downside momentum, which poses a concern. The trade maintains a R312.00 target with a R265.00 stop-loss. | The share triggered its stop-loss after a brief test of the 200-day simple moving average. We may reassess the counter in future should the technical structure improve. |
| Time to exit | 11 February 2026 | 17 February 2026 | 09 December 2025 | - |
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