Eutelsat Shares Face Persistent Headwinds Amid Strategic Push

Eutelsat FR0010221234

Despite securing a major contract and advancing key strategic projects, Eutelsat's share price continues to demonstrate weakness. Following multiple consecutive losing sessions and clear technical warning signals, investor focus is shifting to the company's upcoming financial report in February. The central question is whether the interim results can alleviate some of the prevailing concerns regarding profitability and the company's debt load.

Even as its stock struggles, the satellite operator is aggressively pursuing its expansion plans. On January 12, the company placed an order with Airbus Defence and Space for an additional 340 OneWeb satellites, bringing the total order volume to 440 units. Deliveries for this new batch are scheduled to commence before the end of 2026.

These satellites will be manufactured at the Airbus facility in Toulouse and will feature technological upgrades designed for enhanced efficiency and flexibility. This project also represents the first significant industrial contract finalized following a substantial capital raise.

In December 2025, Eutelsat completed a capital increase totaling €1.5 billion. This included a rights issue of approximately €670 million. The newly raised equity is intended to fund an investment program worth around €4 billion between 2026 and 2029.

Technical and Trading Performance

The equity closed on January 22 at €2.22, marking a decline of 6.14% for its third straight day of losses. In current trading, the shares are hovering near €2.21, effectively confirming the recent downward pressure.

From a chart perspective, the picture appears fragile:
- The price remains below the 50-day moving average of €2.28
- Resistance at €2.55 has not been sustainably breached
- A key support zone exists around €1.64
- The 52-week range spans from €1.15 to €9.30
- The company's market capitalization stands at roughly €2.6 billion

The Relative Strength Index (RSI) is at 75, signaling an overbought condition. This points to ongoing consolidation pressure, particularly as the medium-term trend remains downward.

Divergent Analyst Views

Market analysts have responded with caution to recent developments, reflecting widespread uncertainty about Eutelsat's future earnings potential. Their views remain mixed despite the successful capital increase.

Current analyst ratings and price targets include:
- Morgan Stanley: Price target of €2.50 with a "Market Weight" rating
- Oddo BHF: Price target reduced from €2.60 to €1.70, maintaining a neutral stance
- Deutsche Bank: Price target of €2.30, with an upgrade from "Sell" to "Hold"

The average 12-month price target among analysts is €2.65. However, the wide range of targets—from €1.40 to €5.22—highlights the significant divergence in how experts are assessing the company's future profit and cash flow trajectories.

The Strategic Role of IRIS2

On a strategic level, the European IRIS2 program is a key component. Eutelsat is part of the SpaceRISE consortium, which was awarded the contract for this EU satellite communications initiative.

The European Space Agency (ESA) reported the successful completion of the System Requirements Review on January 8. A Service Review is expected to follow by the end of January. Consequently, IRIS2 is moving into sharper focus as a potential long-term source of revenue and a strategic project that could influence the company's valuation.

Focus Shifts to Interim Financials

All attention now turns to the financial report due in mid-February. Key metrics related to leverage and cash flow are already under scrutiny: the debt-to-equity ratio sits at 119%, and the most recent reported free cash flow was negative €289 million.

The critical factor will be whether Eutelsat's half-year results can demonstrate tangible progress on cash flow generation and provide a credible roadmap for financing its ambitious 2026–2029 investment program. The answer will likely determine whether the current selling pressure persists or if the stock can find room for a recovery.