Philip Morris guides to strong 2026 EPS growth as Zyn momentum holds

South African Market Summary

The Johannesburg Stock Exchange advanced on Friday, with the All Share Index rising 1.27% to 120,051.24 and the Top 40 gaining 1.37% to 112,034.29. Sentiment was supported by a new framework trade agreement with China aimed at expanding duty-free access for South African exports, partly offsetting pressure from elevated US tariffs. Domestically, Nersa approved higher-than-planned Eskom tariff increases, lifting the forward cost outlook. Meanwhile, net foreign reserves climbed to US$74.88 billion. Investors now turn to December mining and manufacturing output data for updated signals on industrial and economic momentum.

European Market Summary

The pan-European STOXX 600 rebounded 0.9% to 617.12, recovering from the prior session’s weakness as investors navigated mixed earnings and macro developments. Stellantis slumped sharply after booking sizeable charges tied to scaling back electric-vehicle plans, dragging the autos sector lower. Policy focus centred on the European Central Bank, which moved to widen euro liquidity access for foreign central banks, reinforcing the currency’s international role. UK labour market data showed firmer starting salaries and easing hiring declines, suggesting resilience in wage dynamics despite a softer growth backdrop across the region.

US Market Summary

US equities rallied strongly, with the Dow Jones Industrial Average surpassing 50,000 and the S&P 500 closing sharply higher, led by gains in semiconductor stocks. Nvidia and peers advanced, while Amazon fell after signalling a significant rise in AI-related capital expenditure. Policy commentary remained in focus, with US officials suggesting a gradual approach to balance sheet reduction and acknowledging labour-market fragility. Despite recent volatility linked to AI competition and valuations, investor appetite returned to growth sectors, reflecting confidence in structural demand for AI infrastructure and a still-supportive, if evolving, monetary policy backdrop.

Asian Market Summary

Regional equities advanced, led by Japan where the Nikkei 225 reached a record high following a decisive election victory for Prime Minister Sanae Takaichi, strengthening expectations of policy continuity and fiscal support. In Hong Kong, Montage Technology surged on its market debut after a sizeable capital raise to fund AI-related memory interface research. Meanwhile, Australian data showed household spending eased in December, reinforcing the Reserve Bank of Australia’s recent rate hike as policymakers balance cooling consumption with still-elevated annual spending growth.

Commodity Market Summary

Oil prices eased as renewed diplomatic engagement between the US and Iran tempered immediate supply disruption fears around the Strait of Hormuz, a chokepoint for roughly a fifth of global crude flows. Nevertheless, geopolitical risk premia remain elevated amid ongoing sanctions pressure on Russian exports and proposed EU restrictions on services linked to Moscow’s seaborne crude trade. Indian refiners’ reported pullback from Russian barrels may further reshape trade flows. In precious metals, gold held firm above US$5,000/oz, supported by a softer dollar and cautious positioning ahead of key US labour data that could influence the interest-rate outlook.

Currency Market Summary

The South African rand strengthened in volatile trade, supported by firmer precious metal prices, notably gold and platinum, which underpin the country’s export profile. In Asia, the Japanese yen rebounded after Prime Minister Sanae Takaichi’s election victory, with markets anticipating fiscal support and improved domestic sentiment. The U.S. Dollar Index was little changed ahead of a heavy US data calendar, including retail sales, inflation and labour market figures. Rate expectations continue to shift modestly, with futures markets pricing a slightly higher probability of Federal Reserve easing in coming months.

Gold Fields Limited (GFI) +4.63%

Gold Fields expects a substantial uplift in FY2025 earnings, driven by higher realised gold prices, stronger sales volumes and the full consolidation of Gruyere. Headline EPS is forecast at US$2.79–US$2.97, more than doubling year on year, while basic EPS is projected at US$3.87–US$4.11. Normalised EPS is also set to rise sharply. Group production of 2.44Moz was 18% higher and at the top end of guidance, supported by the ramp-up of Salares Norte and increased Gruyere attribution. Costs rose modestly, with AISC of US$1,645/oz remaining within guidance despite inflation and higher sustaining capital. The update underscores improved scale, operational momentum and strong leverage to the elevated gold price environment.

Discovery Limited (DSY) 0.69%

Discovery announced the acquisition of Phase 1 of its Sandton head office complex for R4.05 billion, funded through pre-arranged debt, while cancelling the lease on Phase 2 space. The move reflects a strategic shift from long-term leasing to ownership, supported by lower Johannesburg property valuations and reduced interest rates. Management expects immediate and growing net cash-flow savings, with an estimated net present value benefit of approximately R800 million over the remaining lease term, alongside asset ownership. Although the transaction will initially lift the Group’s financial leverage ratio, it is forecast to enhance earnings and trend leverage back toward the lower end of its 10–20% target range over time, strengthening long-term cost efficiency and balance-sheet structure.

Eastern Platinum Limited (EPS) -12.73%

Eastern Platinum has secured an additional C$1 million credit facility from Ka An Development, lifting total available funding across facilities to C$2 million. The six-month facility carries interest at 10.25% and will be used as working capital to support the ramp-up of underground production at the Crocodile River Mine, where the company is targeting 70,000 tonnes of run-of-mine ore per month by end-2026. While modest in size, the funding provides near-term liquidity as operational intensity increases. As the lender is an insider, the transaction qualifies as a related-party arrangement but falls below regulatory valuation and minority approval thresholds. The facility remains subject to Toronto Stock Exchange approval, reinforcing Eastplats’ short-term funding flexibility.

Philip Morris International Inc. (PM) +0.45%

Philip Morris International forecast 2026 adjusted EPS growth of 11.1%–13.1%, ahead of market expectations, signalling continued earnings momentum despite intensifying competition in next-generation nicotine products. Investor focus remains on the sustainability of growth at Zyn, its leading nicotine pouch brand, as rivals including British American Tobacco gain share in the category. US pouch volumes rose strongly in the fourth quarter, though revenue was tempered by promotional activity. Heated tobacco device IQOS also faces pressure in Japan, where tax and pricing changes may weigh on volumes. Nevertheless, PMI achieved its medium-term targets early and extended growth ambitions to 2028, underpinned by high single- to low double-digit shipment growth expectations from its smoke-free portfolio.

DBS Group Holdings (D05) -0.60%

DBS reported a 10% year-on-year decline in fourth-quarter net profit to S$2.26 billion, missing expectations as net interest margin compressed to 1.93% amid lower domestic rates. Return on equity eased to 13.5%, while provisions rose sharply, largely linked to property exposure, partly offset by allowance write-backs. Wealth management remained a bright spot, with assets under management rising 19% in constant-currency terms to a record S$488 billion. Management expects 2026 net interest income and net profit to dip slightly from 2025 levels, assuming lower benchmark rates and a firmer Singapore dollar. The bank declared a combined ordinary and capital return dividend of S$0.81 per share for the quarter.

Prefer to read the full report offline? Click here to download the full report.