The French satellite operator Eutelsat is witnessing an extraordinary rally in its share price, with the stock advancing more than 31% over just a few trading sessions. This powerful upward move was ignited by a fresh analytical report indicating the company’s shares are trading at a substantial discount, nearly 85% below their calculated fair value.
A Valuation Discrepancy Captures Market Attention
According to a Discounted Cash Flow (DCF) analysis conducted by Simply Wall St., Eutelsat’s equity is priced at a staggering 84.9% discount to its intrinsic value. The revelation of this significant valuation gap acted as a powerful catalyst, immediately drawing investment from both institutional players and private investors seeking undervalued opportunities.
The company’s unique strategic positioning appears to be the core driver of this newfound attractiveness. Eutelsat has established itself as the sole global provider operating an integrated network that combines both geostationary (GEO) and low Earth orbit (LEO) satellites, a distinct competitive advantage in the connectivity sector.
Government Backing Reinforces Fundamental Strength
Substantial state-level investments provide strong evidence of Eutelsat’s fundamental appeal and strategic importance. The British government is maintaining its 10.89% stake, valued at 163 million euros. Simultaneously, France, acting as the largest shareholder, has committed a further 1.35 billion euros. This robust political and financial endorsement sends a powerful, confidence-boosting signal to the broader capital markets.
Should investors sell immediately? Or is it worth buying Eutelsat Communications?
Low Earth Orbit Division Fuels Growth Trajectory
The company’s ongoing strategic pivot from a traditional video service provider to a comprehensive connectivity solutions provider is yielding measurable, positive results. Central to this transformation is the impressive performance of its LEO segment, powered by the OneWeb constellation, which is rapidly emerging as the primary growth engine.
Key performance indicators for the LEO division include:
- An 80% growth rate driven by the OneWeb constellation
- The segment already contributes 15% of total revenue
- Projected revenue of 1.24 billion euros for the 2025 fiscal year
- A forecast of 1.34 billion euros in revenue for 2026
From a technical analysis perspective, the stock has decisively broken through several key resistance levels. With the current share price at 3.66 euros, a glance at the 52-week high of 9.30 euros suggests there could be significant potential for further appreciation.
The immediate future hinges on the upcoming financial report scheduled for release on October 21. These Q1 figures for the 2025-26 fiscal year will be scrutinized by the market, with a particular focus on the continued progress of the LEO division. The central question remains: will the operational performance fully justify the recent explosive market enthusiasm?
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