Johnson & Johnson beats Q4 and lifts 2026 outlook despite pricing and tariff headwinds

South African Market Summary

South African equities edged higher, with the All Share and Top 40 indices gaining 0.20% and 0.17% respectively, to close at 120,780.97 and 112,885.03 points. December headline inflation rose marginally to 3.6% year on year, in line with expectations, reinforcing market conviction that the SARB retains scope to deliver multiple interest rate cuts in 2026. Retail sales remained supportive, rising 3.5% year on year in November and 0.6% month on month. In corporate news, Nedbank proposed acquiring a 66% stake in Kenya’s NCBA Group for R13.9 billion via a share-based transaction, accelerating its East African growth strategy.

European Market Summary

European equities closed flat after paring earlier losses as US President Donald Trump softened rhetoric around Greenland, easing tariff fears. The STOXX 600 ended unchanged at 602.67, having been down nearly 1% earlier amid concerns over threatened trade measures. Investor focus also remained on earnings, with quarterly profits expected to post their sharpest decline since late 2023. UK data were mixed: December inflation surprised to the upside, services inflation met expectations, industrial orders stabilised, and price expectations rose to a near three-year high, signalling persistent cost pressures for policymakers globally.

American Market Summary

Wall Street rebounded sharply, with the S&P 500 recording its largest one-day gain in two months as concerns over potential US tariffs on European allies eased following progress on a Greenland framework agreement. The Dow and Nasdaq also posted their strongest percentage gains in weeks, reversing the prior session’s sell-off. All S&P 500 sectors advanced, led by energy on higher natural gas prices and strong earnings from Halliburton. Airline stocks rallied on upbeat guidance, while Netflix lagged after cautious outlook commentary and a pause in share buybacks.

Asian Market Summary

Asian markets rebounded as easing US tariff rhetoric lifted risk appetite, with South Korea’s Kospi breaching the 5,000 level. China issued CNY93.6 billion of ultra-long special bonds to fund equipment upgrades, supporting investment exceeding CNY460 billion, while youth unemployment edged lower in December. South Korea’s economy unexpectedly contracted in Q4 2025, though the AI-driven export outlook should support policy stability. Australia surprised positively on employment, with joblessness falling to a seven-month low, prompting markets to price a rising probability of a near-term rate hike next month amid shifting global conditions.

Currency Market Summary

South Africa’s rand strengthened against the dollar as markets looked through mixed domestic data, reflecting resilient risk appetite. The move contrasted with broader dollar firmness, as the greenback held gains after President Trump withdrew tariff threats against several European NATO nations and outlined a framework agreement on Greenland. Reduced geopolitical risk pressured traditional havens, with the Swiss franc retreating from a three-week high and gold easing from record levels. The combination of firmer emerging-market currencies and softer safe-haven demand signals improving global sentiment despite lingering macro uncertainty into early 2026.

Commodity Market Summary

Oil prices edged higher as easing geopolitical tensions supported the global growth and demand outlook. President Trump stepped back from tariff threats linked to Greenland and ruled out the use of force, reducing risks of a US–Europe trade conflict. Prices were already underpinned by supply disruptions after Kazakhstan halted output at key oilfields. US inventory data showed a larger-than-expected rise in crude and gasoline stocks, partially offset by lower distillates. Meanwhile, gold and precious metals retreated as safe-haven demand faded and a firmer dollar weighed on prices, signalling a modest rotation back towards risk assets.

Karooooo Limited (KRO) -1.99%

Karooooo delivered a solid Q3 FY2026 performance, underpinned by accelerating subscriber growth and resilient profitability. Adjusted EPS rose 11% year on year to ZAR8.54, while subscription revenue increased 20% to ZAR1.24 billion, supported by record net Cartrack subscriber additions of 111,478. Operating profit grew 14% despite margin pressure from growth-related investments. Management raised the midpoint of FY2026 revenue guidance, reflecting strong ARR momentum, expanding platform adoption and confidence in long-term value creation through disciplined capital allocation.

Quilter Plc (QLT) +4.24%

Quilter delivered a record fourth quarter, generating core net inflows of £2.4 billion despite UK Budget-related uncertainty, lifting full-year 2025 core net inflows to £9.1 billion, up 75% year on year. Group AuMA increased 18% to £141.2 billion, supported by strong platform flows and favourable market movements. The Quilter Platform surpassed £100 billion of assets, reinforcing its scale advantage. Improved persistency, rising adviser productivity and resilient High Net Worth flows underpin positive momentum entering 2026.

Numeral Limited (XII) -50.00%

Numeral reported sharply higher revenue for the nine months to November 2025, with turnover rising 318% year on year to 1.88 million, reflecting expanded operating activity. Operating profit declined 11% to 314,000 as cost growth outpaced revenue scaling during the period. Headline earnings per share fell 41% to 0.0166, mirroring margin pressure and investment effects. The results indicate strong top-line momentum but weaker earnings conversion, highlighting execution and cost discipline as key focus areas for investors as the business scales over the medium term amid expansion initiatives and market development.

Johnson & Johnson (JNJ) -0.09%

Johnson & Johnson guided 2026 sales and earnings ahead of consensus despite drug price concessions and tariff headwinds. Management forecast revenue of $99.5–100.5 billion and earnings of $11.43–11.63 per share, exceeding expectations, while absorbing hundreds of millions of dollars from US pricing agreements and around $500 million of medical device tariffs. Fourth-quarter results beat forecasts, supported by Darzalex, Tremfya and Carvykti growth, offsetting weaker Stelara sales. Management reiterated confidence in accelerating growth through 2026 and potential double-digit expansion by decade-end. Balance sheet strength and pipeline depth underpin resilience amid pressures.

Halliburton Company (HAL) +4.05%

Halliburton delivered a strong fourth quarter, beating profit expectations on resilient international demand as North American activity remained subdued. Adjusted earnings reached 69 cents per share versus expectations of 55 cents, supported by higher activity across Latin America, Europe and Africa. International revenue rose 2.9% to $3.5 billion, offsetting flat North America revenue of $2.2 billion. Management signalled interest in re-entering Venezuela once legal and payment terms are secured. Cost discipline and international mix underpin resilience.

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