Eutelsat Shares Struggle to Gain Traction Despite Aviation Deal

Eutelsat FR0010221234

Investors continue to sell off Eutelsat stock, pushing it to new lows even after the company unveiled a strategic move into the aviation connectivity sector. The share price closed at a mere €2.18 yesterday, cementing a loss exceeding 8% since the start of the week. This persistent decline raises questions about why the market is dismissing the satellite operator’s expansion strategy.

The core issue appears to be the immense financial burden of Eutelsat’s transformation. The group is executing a capital-intensive shift away from its traditional TV satellite business toward becoming a global connectivity provider. This ambitious overhaul was underscored recently by a management decision to award Airbus a €2.2 billion contract for new OneWeb satellites.

While a completed capital increase and a credit rating upgrade from Moody’s have provided some financial stability, shareholders are now demanding concrete proof that the new business model can be profitable. The market remains unconvinced that the company can convert these substantial investments into revenue quickly enough.

New Aviation Partnership Fails to Impress

The negative sentiment persisted despite an announcement on January 22 detailing a new partnership. Eutelsat is collaborating with technology firm Immfly and U.S.-based provider Gogo to target the growing market for fast in-flight internet on low-cost airline fleets. The technical solution centers on the OneWeb Low Earth Orbit (LEO) constellation, which promises significantly lower latency compared to traditional geostationary satellites.

However, with the commercial service launch still scheduled for 2026 and only pilot programs currently running, this news was insufficient to alter the stock’s downward trajectory. The focus on budget airlines has yet to convince the investment community.

Technical and Analytical Divergence

The market’s reserved reaction was mirrored in the technical chart picture, where the share price broke below the key 50-day moving average at €2.28. Analyst opinions further reflect the prevailing uncertainty, presenting a wide range of assessments:

• Morgan Stanley and Kepler Cheuvreux maintain a more optimistic view, citing a price target of €2.50.
• JPMorgan and Oddo BHF express greater skepticism, with targets set at €1.90 and €1.70, respectively.

This broad disparity in price targets highlights the lack of consensus on Eutelsat’s near-term prospects.

All Eyes on Upcoming Financials

According to forecasts, the LEO division needs to demonstrate revenue growth of approximately 50% to meet expectations. The first real opportunity for clarity on operational progress will come with the release of half-year results on February 13, 2026. Investors are poised to scrutinize these figures, seeking hard data that validates the company's strategic direction. Only tangible evidence of growth in the new connectivity segments is likely to improve market sentiment.

@ boerse-global.de | FR0010221234 EUTELSAT