Eutelsat Shares Bounce Back 3.8% at Midday After Two-Day Decline

Mid-Session Recovery

This Thursday at mid-session, Eutelsat shows a gain of 3.77% at 2.20 euros, a welcome rebound after two consecutive sessions in the red. The stock had closed at 2.12 euros on Wednesday, its lowest level in several weeks, after losing 4.29% during the day and 12.07% the day before. Over the week, the decline remains pronounced at -13.78%, while the quarterly performance is at -7.11% and the stock is down 7.78% over the past year. This underperformance contrasts with the CAC 40, which shows an annual increase of 12.57%. Trading volumes remain modest this Thursday, with only 0.24% of the capital traded, reflecting investor caution in a context marked by the Thanksgiving holiday in the US. Technically, the stock is significantly below its reference moving averages. The 50-day moving average is at 3.39 euros and the 200-day at 3.50 euros, respectively 54% and 59% above the current price, signaling a well-established downward trend. The RSI reaches a level of 18, indicating an extreme oversold situation that could favor a technical rebound in the short term. This setup suggests that the stock has been heavily penalized and that opportunistic buying may emerge at these depressed levels.

Reason Behind the Sharp Drop

The sharp drop observed on Tuesday and Wednesday can be explained by the launch of a major operation. On November 25, Eutelsat announced a capital increase with the maintenance of preferential subscription rights of about 670 million euros, as part of a total fundraising of 1.5 billion euros. The subscription price was set at 1.35 euros per share, representing a discount of 44.6% compared to the theoretical value of the share ex-rights calculated on November 21. This significant discount explains the selling pressure on the stock, as investors anticipate the dilutive effect of the operation. The subscription period runs from November 28 to December 9 inclusive. This fundraising follows an initial private placement of 828 million euros carried out on November 21, at a price of 4 euros per share, subscribed by the French State, Bharti Space Limited, the British government, CMA CGM, and the Strategic Participation Fund. The strategic goal is to finance the investment plan of about 4 billion euros for the period 2026-2029, while reducing the leverage ratio to approximately 2.5 by the end of the fiscal year 2025-26. Following the overall operation, the French State will become the largest shareholder with nearly 30% of the capital.

Technical Indicators Show a Mixed Picture

Technical indicators present a mixed picture. The MACD shows a value of -0.21 with a signal line at -0.15 and a histogram at -0.06, indicating a still negative momentum despite the day's rebound. The CMF (Chaikin Money Flow) stands at -0.21, signaling continuous capital outflows and persistent selling pressure. These elements suggest caution, even though the RSI in deep oversold territory indicates potential for a technical recovery. The stock is now trading at 2.20 euros, slightly above the support threshold identified at 2.12 euros, tested on Wednesday at close. The major resistance stands at 3.83 euros, a level that seems distant given the current configuration. The one-month volatility reaches 32.12%, reflecting the magnitude of recent movements. The beta of 0.15, however, indicates a low correlation with the market, which may limit the impact of variations in the CAC 40 on the stock. Investors will remain attentive to the success of the ongoing capital increase and the group's ability to convince of the relevance of its development strategy in low Earth orbit satellites.