Eutelsat Shares Face Analyst Caution Following Capital Raise

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Eutelsat's stock is experiencing valuation pressure in the wake of a €1.5 billion capital increase. Market analysts from Oddo BHF and BNP Paribas have initiated coverage with a cautious stance, significantly reducing their price targets for the satellite operator. While the company's balance sheet is now fortified, the market awaits tangible operational success from its OneWeb low-Earth-orbit (LEO) segment to justify the move.

Beyond the financial calculations, Eutelsat's OneWeb division is beginning to show concrete applications. Recent reports confirm the use of its satellite technology by the Indian Army during relief operations in Sri Lanka. In partnership with Airtel, Eutelsat OneWeb is providing connectivity in flood-affected regions, offering a practical proof-of-concept for crisis scenarios.

Concurrently, Nelco, part of the Tata Group, is conducting intensive testing with Eutelsat OneWeb for enterprise customers across India. These developments are viewed as critical steps for market penetration and for monetizing the satellite fleet within the strategically vital Indian market.

Revised Price Targets Reflect Share Dilution

The substantial equity raise has led analysts to recalibrate their valuations due to significant share dilution.

• Oddo BHF has assigned a "Neutral" rating, slashing its price objective to €1.70 from a previous €2.60. The analysts cite the dilutive impact of the capital measure as the primary reason, framing the central investment question as whether growth in the LEO business can sufficiently offset declines in the traditional geostationary (GEO) satellite segment.
• BNP Paribas also commenced coverage with a "Neutral" recommendation, setting a slightly higher target of €2.00. The bank assesses the risk-reward profile as balanced. On the positive side, it notes the secured financing for the LEO constellation. Counterbalancing this are the competitive threats posed by SpaceX's Starlink and Amazon's Project Kuiper, alongside the continued high investment requirements.

Key Data Points:
* Completion of a €1.5 billion capital increase, resulting in considerable shareholder dilution.
* The French state maintains a stake of nearly 30%, while Bharti Space substantially increased its holding (approximately 88.7 million shares).
* Analyst consensus suggests fair value lies only modestly above the current trading level.
* Starlink and Amazon Kuiper remain dominant competitive risk factors.

Narrow Trading Range Anticipated Near-Term

The recapitalization has resolved balance sheet concerns, but at a high cost. In the absence of significant revenue leaps from the OneWeb division, the share price is expected to oscillate within a relatively tight band, likely between €1.60 and €2.00 in the short term. Forward momentum is now heavily dependent on upcoming quarterly results and the announcement of concrete contract wins within the LEO segment.