Eutelsat Shares Bounce 2.3% Mid-Session Following Massive Acquisition by Bharti Space
Eutelsat Communications' stock is up 2.31% this Tuesday, December 23, at midday, reaching 1.684 euros after opening at 1.65 euros. This technical rebound follows the announcement of an acquisition of approximately 88.7 million shares by Bharti Space Limited on December 16, at a unit price of 1.35 euros. With only 0.06% of the capital traded, liquidity remains modest. Over a week, the decline still reaches 10.52%, while the quarterly performance is at -31.81% and annual at -12.42%, confirming the persistent fragility of the case despite the completion of the 1.5 billion euro capital increase.
Major Shareholder Activity
The technical rebound observed this Tuesday mid-session follows a major transaction executed on December 16 by Bharti Space Limited, a director of Eutelsat Communications. The Indian entity acquired 88,683,512 shares on Euronext Paris at a price of 1.35 euros per share, for a total amount of approximately 119.7 million euros. This transaction reflects the confidence of a strategic shareholder in the case, as the stock was trading close to its historical lows. This movement is part of a major shareholder restructuring. Following the total capital increase of 1.5 billion euros completed in early December, Bharti Space Limited now holds 17.88% of the capital, behind the French State which became the main shareholder with 29.65%. The overall operation allowed the issuance of 496,129,728 new shares at a unit price of 1.35 euros, bringing the total share capital to 1,178,308,106 shares. The funds raised aim to finance the deployment of the low orbit constellation and the IRIS² project, while bringing the debt ratio from 3.9 to about 2.5 by the end of 2026. Despite this technical recovery of 2.31% this Tuesday, the stock remains locked in a structural downward dynamic. Over a week, the decline reaches 10.52%, reflecting the persistence of investor distrust due to the massive dilutive effect and uncertainties over the rapid generation of revenue from the heavy investments made. The multiplication of analyst recommendations in recent days has not been enough to reverse the underlying trend.
Financial Institutions' Adjusted Positions
Three investment banks have recently adjusted their position on the Eutelsat file, reflecting a gradual but cautious improvement in sentiment. On December 22, Oddo BHF lowered its price target from 2.60 euros to 1.70 euros while maintaining a neutral recommendation, highlighting the dilutive impact of the capital increase. On December 18, BNP Paribas initiated coverage with a market performance recommendation and a target at 2 euros, representing an upside potential of 18.8% compared to the current price of 1.684 euros. Finally, Deutsche Bank raised its advice from sell to hold on December 11, maintaining a target at 2.30 euros. These adjustments reflect a recognition of the regained solidity of the group's financial structure, but also marked caution regarding Eutelsat's ability to quickly generate value. High investment expenditures related to the deployment of the LEO constellation and the IRIS² project will continue to weigh on cash flow generation in the short and medium term. The group aims for stable revenue in 2025-2026 with an adjusted EBITDA margin slightly below the previous fiscal year, and a 50% growth in LEO revenues, but these targets remain subject to strong operational execution. The market remains thus on hold, favoring observation of upcoming concrete announcements regarding the deployment of constellations and the first tangible signs of monetization. Without a strong operational catalyst, the stock could remain volatile and under pressure despite a historically low valuation level and strong support from its strategic shareholders.
Technical Analysis Perspective
From a technical standpoint, Eutelsat is in a marked oversold zone, with an RSI at 24 points, well below the threshold of 30. This situation reflects an intense selling movement for several weeks and may constitute a signal of a very short-term technical respite, as observed this Tuesday. However, in the absence of a solid fundamental catalyst, such a rebound does not guarantee any lasting turnaround. The stock remains well below its reference moving averages: the MM50 is established at 2.86 euros, 69.8% above the current price, and the MM200 at 3.31 euros, confirming a deeply entrenched structural bearish trend. The MACD displays an almost neutral configuration with a line at -0.32, a signal at -0.31, and a histogram of -0.01, suggesting a possible slowdown in the bearish momentum without however signaling an imminent bullish reversal. On the other hand, the Chaikin Money Flow remains strongly negative at -0.34, showing net capital outflows and a total lack of buying conviction. The stock is currently testing a support threshold at 1.64 euros, a level now very close, while a major resistance is forming at 3.28 euros, nearly double the current price. With a one-month volatility of 33.42%, Eutelsat retains a high-risk profile, characteristic of a case subject to strong operational uncertainty and a major dilutive effect. The negative beta coefficient of -0.52 underlines a marked decorrelation with the stock market, reflecting the uniqueness of the case and its exposure to specific factors in the space and telecoms sector. Investors will need to monitor upcoming operational communications to assess the group's ability to realize its strategic ambitions.
