Eutelsat Shares Drop 5.15% Midday Following New Recommendation

Challenging Trading Session for Eutelsat

Eutelsat Communications records a challenging session this Thursday, December 18, losing 5.15% by midday to settle at 1.732 euros, with only 0.19% of its capital traded. This decline is part of a downward trend established over several weeks, exacerbated by the completion of a total capital increase of 1.5 billion euros. The operation concluded with a final tranche of 670 million euros, achieving a subscription rate of 133% with total demand at 892 million euros. Despite this technical success, the market penalizes the massive dilutive effect: 496,129,728 new shares were issued at a unit price of 1.35 euros. The weekly decline now stands at 15.72%, while the three-month performance is -28.29%, reflecting persistent investor skepticism. Following the operation, the total share capital reaches 1,178,308,106 shares. The French state becomes the largest shareholder with 29.65% of the capital, followed by Bharti Space Ltd (17.88%), the United Kingdom (10.89%), CMA CGM (7.46%), and FSP (4.99%). The funds raised aim to finance the deployment of low-orbit activities and the IRIS² constellation, while aiming to reduce the debt ratio from 3.9 to about 2.5 by the end of 2026. BNP Paribas initiated coverage of the stock this Thursday with a 'market perform' recommendation and a target price of 2 euros, representing a potential upside of 15.5% from the current price. This analysis follows an upgrade by Deutsche Bank on December 11, from 'sell' to 'hold' with a target maintained at 2.30 euros. These recommendations reflect a gradual improvement in analyst sentiment, albeit cautious. The strengthening of the group's financial structure is now acknowledged, but the market remains cautious about Eutelsat's ability to quickly generate value in a context of high investment expenditures related to the deployment of its LEO constellation.

Technical Analysis of Eutelsat's Weak Position

Technically, Eutelsat is in a particularly weakened configuration. The Relative Strength Index (RSI) is at 28 points, indicating an oversold level that reflects intense selling pressure over the past several weeks. Although this situation may signal a short-term technical respite, it does not guarantee any sustained turnaround in the absence of a solid fundamental catalyst. The stock is significantly below its moving averages: the 50-day moving average is at 2.99 euros, 73% above the current price, and the 200-day moving average at 3.37 euros, confirming a structural bearish trend established over several months. The 20-day moving average at 2.25 euros also indicates recent unrelenting selling pressure. The MACD shows a nearly neutral configuration with a line at -0.32, a signal at -0.31, and a histogram close to zero, suggesting a possible slowdown in the bearish momentum but not signaling an imminent bullish reversal. Conversely, the Chaikin Money Flow (CMF) remains strongly negative at -0.32, indicating significant capital outflows and a lack of buying conviction. The stock is currently testing a technical support at 1.83 euros, a level already reached in recent sessions, while a resistance is forming at 3.28 euros. With a one-month volatility of 33.30%, Eutelsat maintains a high-risk profile, characteristic of a case subject to significant operational uncertainty and a major dilutive effect. The Average True Range (ATR) of 0.05 euros confirms this significant daily range, reflecting erratic movements in a challenging environment.