Eutelsat Shares Rise 3.67% at Midday Despite Mixed Recommendations
On Wednesday, Eutelsat Communications shares showed an increase of 3.67% at midday, with the price reaching 2.26 euros. This rise occurs as the satellite operator continues to make strategic announcements and renew contracts. Despite a decline of 5.44% over seven days and 17% over three months, the stock remains positive over the year with an increase of 43.75%.
Strategic Expansion and Shareholder Confidence
The group continues its industrial plan with the order of an additional 340 OneWeb satellites from Airbus Defence and Space, announced in mid-January. This operation, adding to an initial order of 100 units placed at the end of 2024, brings the total of new generation satellites ordered to 440 units. The investments are estimated at approximately 2.2 billion euros and aim to gradually replace the first generation of the OneWeb constellation, while enhancing the embedded technological capabilities. Deliveries will start by the end of 2026. Following the total capital increase of 1.5 billion euros completed in early December, Bharti Space Limited holds 17.88% of the capital, behind the French state which has become the main shareholder with 29.65%. This shareholder restructuring, strengthened by Bharti Space's massive acquisition of 88.7 million shares on December 16 at 1.35 euros, reflects the strategic shareholders' confidence in the group's industrial trajectory. Meanwhile, Eutelsat has secured the renewal of its contract with Swiss operator Kabelio until 2031, ensuring commercial continuity in a key segment.
Technical Analysis and Market Sentiment
Technically, the stock is trading slightly above its 50-day moving average (2.20 euros) and is close to the resistance threshold at 2.55 euros. The RSI stands at 59, indicating a neutral momentum without significant pressure. However, volatility remains high at 23.50% over a month, reflecting a persistent sensitivity to announcements. The support identified at 1.64 euros currently protects the stock from further downturns. Analysts' recommendations reflect increased caution. Morgan Stanley initiated coverage on January 20 with a target of 2.50 euros and a market-weight rating, suggesting a limited upside potential of 10.6% from the current price. Meanwhile, Oddo BHF has lowered its target from 2.60 euros to 1.70 euros while maintaining a neutral stance, indicating a potential downside of 24.8%. These adjustments highlight questions about the group's ability to quickly generate value in the face of massive investments needed for the deployment of the LEO constellation and participation in the European IRIS² project.
