Eutelsat Shares Decline Midday Amid Analyst Disagreement
Eutelsat Communications' stock is down 3.18% at 2.285 euros this Thursday mid-session, after reaching 2.36 euros the previous day. This correction occurs as the satellite operator has just finalized a strategic order of 340 OneWeb satellites from Airbus in mid-January, intended to ensure the continuity of its low-earth orbit constellation.
The company is operating in a context marked by the strengthening of its capital structure with the acquisition of 88.7 million shares by Bharti Space Limited in December for an amount of 4 billion euros, and by mixed analyst opinions on its potential.
Market Caution Evident in Analyst Recommendations for Eutelsat
Analyst recommendations reflect market caution regarding Eutelsat's case. Morgan Stanley initiated coverage on January 20 with a market-weight rating and a target set at 2.50 euros, indicating an upside potential of 9.4% from the current price. Conversely, Oddo BHF revised its position at the end of December by significantly lowering its target from 2.60 euros to 1.70 euros, a discount of 25.7%, while adopting a neutral recommendation.
This difference in assessment reflects questions about the group's ability to generate growth in a sector where competition is intensifying. The strategic repositioning of the operator towards low orbit, supported by a capital increase of 1.5 billion euros at the end of last year, has yet to prove its profitability. Investors remain attentive to the ramp-up of the OneWeb constellation in the face of American dominance represented by Starlink.
Technical Perspective on the Current Decline
From a technical standpoint, the current decline follows a weekly gain of 2.01%, which had allowed the stock to rebound from its lows. The price is now slightly above its 50-day moving average established at 2.28 euros, but remains well below the 200-day average at 3.10 euros, indicating a still fragile underlying trend.
The relative strength index at 75 indicates an overbought situation, suggesting a waning of the recent bullish momentum and a risk of short-term consolidation. The proximity of the resistance threshold at 2.55 euros, tested at the beginning of the week, poses a major obstacle for any sustained recovery. Should the decline continue, the support level at 1.64 euros could be tested, representing a 28.2% drop from the current levels.
