Eutelsat Shares Under Pressure Following Major Equity Raise

The stock of European satellite operator Eutelsat is experiencing significant selling pressure. This decline persists despite recent analyst commentary that views the company’s strengthened balance sheet more favorably. The central question for investors is whether this improved financial foundation can restore confidence in a share price that has fallen sharply.

Capital Increase Drives Dilution and Decline

The primary catalyst for the current weakness is a completed capital increase totaling €1.5 billion. Eutelsat issued 496.1 million new shares at a price of €1.35 per share. The final tranche of €670 million was notably oversubscribed by 133%, with demand reaching €892 million. Nevertheless, the market is reacting negatively to the expansion of the share capital, which now stands at 1.178 billion shares.

This transaction has also led to a notable shift in the shareholder structure:
* Holdings from France now represent 29.65%
* Bharti Space Ltd holds 17.88%
* The United Kingdom accounts for 10.89%
* CMA CGM maintains a 7.46% stake
* FSP holds 4.99%

Share Price Performance and Technical View

In midday trading, the equity lost over 5%, trading at approximately €1.73. The loss widened during the session, at one point exceeding 7% to reach €1.67. The recent performance metrics paint a stark picture:
* The stock is down roughly 15.7% for the week.
* It has declined approximately 28.3% over the past three months.
* Since the start of the year, shares have fallen about 23.1%.

From a technical perspective, the chart appears weak. The Relative Strength Index (RSI) sits at 28, indicating an oversold condition. The share price remains well below its key moving averages:
* 20-day average: €2.25
* 50-day average: €2.99 (approximately 73% above the current price)
* 200-day average: €3.37
With a one-month volatility reading of 33.3%, the risk profile is elevated. Technicians identify a support level near €1.83, with a more significant resistance zone around €3.28.

Analyst Sentiment Shows Cautious Improvement

Market experts are beginning to acknowledge the benefits of the equity raise, even as the stock price falls. BNP Paribas initiated coverage today with a “Market Perform” rating and a €2 price target. This implies a theoretical upside of about 15.5% from current levels, though it has not halted the near-term selling pressure.

This follows an adjustment by Deutsche Bank one week prior, where its recommendation was upgraded from “Sell” to “Hold,” while maintaining a €2.30 price target. The focus for analysts is the balance sheet relief. The capital measure is expected to reduce the company’s net debt/EBITDA leverage ratio from 3.9x to around 2.5x by the end of the 2025/26 fiscal year. This directly addresses core concerns regarding balance sheet strength and the financing of necessary investments.

Should investors sell immediately? Or is it worth buying Eutelsat?

This gradual shift in ratings—from “Sell” to “Hold” to a neutral “Market Perform”—signals a tentative stabilization in analyst mood, though a broad-based re-rating is not yet underway.

Growth Engine: Low-Earth-Orbit Business

Proceeds from the capital increase are earmarked primarily for expanding the Low-Earth-Orbit (LEO) business segment. This area is currently demonstrating robust growth, with LEO revenues surging 70.7% year-over-year to €54.1 million in the first quarter of fiscal 2025/26.

LEO services now constitute over one-third of total connectivity revenue. A key investment focus is the IRIS² constellation, a European project for sovereign, satellite-based communication. Eutelsat is positioning itself as the only operational LEO constellation provider with global reach that is neither American nor Chinese.

Management has reaffirmed its medium-term targets, aiming for revenues between €1.5 and €1.7 billion by fiscal year 2028/29, with an EBITDA margin of at least 60%.

Next Catalyst: Interim Results

The next significant milestone will be the release of the half-year results for 2025/26 on February 13, 2026. For the current fiscal year, management is targeting LEO revenue growth of 50% compared to the prior year.

The critical factor will be whether Eutelsat can demonstrate concrete progress in revenue and profitability using the fresh capital and its rapidly growing LEO segment. If the company can credibly underpin its ambitious 2028/29 targets, it may gradually alleviate the current skeptical market sentiment and support the beleaguered share price.