Eutelsat's 139% Rally Faces a Reality Check: Military Contracts vs. Starlink's Shadow

Eutelsat shares soar 139% YTD, but legacy video drag remains. Government services rise 11.8%, Nexus deal and Anuvu contract bolster connectivity revenue.

The satellite operator Eutelsat has ridden a powerful wave in 2026, with its share price surging more than 139% since January and adding roughly 63% in the past 30 days alone. Yet beneath the headline numbers lies a business at a crossroads — one where a fast-growing government-services arm and a new airline connectivity deal must compensate for a video segment that keeps bleeding revenue.

At €4.26, the stock trades just shy of its 52-week high of €4.31, buoyed by broader sector euphoria that includes chatter about a potential SpaceX initial public offering and multi-billion-dollar NASA lunar infrastructure contracts. But the rally has also left technical fingerprints: the relative strength index has cooled to around 31 after the run-up, and the shares now stand roughly 60% above their 200-day moving average. With the price-to-earnings ratio still negative due to the company’s lack of profitability, the valuation argument hinges entirely on execution.

Government Services and the Nexus Deal

The defence narrative is gaining tangible weight. Eutelsat is currently exhibiting at stand #4002 during CANSEC, Canada’s biggest defence trade show in Ottawa, actively courting military and government contracts. That push aligns with the latest quarterly results: Government Services revenue climbed 11.8% on a like-for-like basis to €50.4 million in the third quarter of fiscal 2025/26, making it one of the company’s strongest divisions.

The multi-orbit strategy — combining geostationary satellites with the OneWeb low-earth-orbit constellation — is the centrepiece of this pitch. Low-latency LEO connectivity is increasingly vital for drone control, reconnaissance and encrypted links in conflict zones, and Eutelsat explicitly cites Ukraine-related demand as a driver. Its backlog has swelled to €3.4 billion, equivalent to 2.8 times annual revenue, with 58% tied to connectivity services.

A key long-term catalyst is the Nexus framework contract with the French Ministry of Defence. Eutelsat expects to start booking revenue from that deal in the fourth quarter, with volume expected to ramp up over its ten-year term. Together, the CANSEC presence and the Nexus agreement provide both near-term visibility and a structural growth story that investors hope can offset the drag from the legacy video business.

Anuvu Deal Strengthens the Aero Leg, but Starlink Looms

On the commercial side, Eutelsat recently inked a multi-year contract with airline-services provider Anuvu, dedicating capacity from its 10B satellite to enhance in-flight connectivity for at least one major global carrier. The 10B satellite, operational since July 2023, uses a fifth-generation digital processor that allows flexible bandwidth allocation — a key selling point for the aviation market’s demands for reliability and efficiency.

This deal reinforces the GEO component of Eutelsat’s multi-orbit approach, even as its LEO services already posted 65% year-on-year growth. The connectivity division as a whole expanded 15.3% like-for-like to €155.7 million in the third quarter. Yet total reported revenue slipped 2.3% to €293 million, as the video segment contracted 13.3% to €128.0 million under the weight of sanctions on Russian broadcasters and the expiry of capacity contracts — a structural decline that the company has yet to fully offset.

The aerospace market is also becoming more contested. American Airlines announced it will equip more than 500 short-haul aircraft with Starlink Wi-Fi starting in the first quarter of 2027. For Eutelsat, that signals direct competition with one of the most cash-rich players in the space industry. Whether the Anuvu deal and the overall multi-orbit offering can absorb that pressure is a question that will dominate investor discussions until the full-year results are published in August.

Sector Tailwinds and Financial Reshuffling

Eutelsat is not navigating these challenges alone. The wider satellite sector is riding heightened attention: reports of a possible SpaceX IPO have lifted peers such as AST SpaceMobile and Redwire, while a proposed US space budget of $71 billion for 2027 — alongside NASA’s multi-billion-dollar lunar infrastructure plans — creates a favourable tailwind for all orbital players.

To fund its ambitions, the company restructured its financing base in March 2026, issuing a €1.5 billion bond and securing additional capital measures to cover its investment plan through 2029. The market’s near-term focus, however, will remain on whether the combination of government contracts, LEO expansion and the multi-orbit strategy can generate enough momentum to offset the video segment’s drag — and whether the stock’s spectacular rally can hold without a clear path to profitability.