A Strategic Deal in Africa Offers Glimmer of Hope for Eutelsat

Following a punishing year for its share price in 2025 and a significant equity dilution, Eutelsat has entered the new year trading at depressed levels. However, a fresh operational announcement has emerged at the turn of the year: a strategic partnership in Gabun aims to validate the company's debated Low Earth Orbit (LEO) satellite strategy. The critical question for investors is whether this development can begin to restore confidence after the stock's severe decline.

Eutelsat shares commenced the year at a closing price of €1.71, a far cry from their 2025 high above €9. This steep fall is primarily a consequence of capital measures taken in November. To strengthen its balance sheet, the company conducted a rights issue raising approximately €670 million.

This necessary move drastically increased the number of outstanding shares. The current share price reflects this dilution, with earnings per share and book value for existing shareholders seeing a marked decrease. While the market has acknowledged the successful refinancing, skepticism persists regarding future profitability. From a chart perspective, the stock has merely stabilized just above its 52-week low of €1.15.

A Concrete Application for OneWeb

Amid typical holiday trading quiet, the satellite operator announced a cooperation with Airtel Gabon. The agreement centers on providing connectivity services for passenger trains using the OneWeb Low Earth Orbit (LEO) satellite constellation.

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

This step is crucial for the equity's valuation as it moves beyond mere intent. It provides tangible evidence that the costly integration of OneWeb can generate concrete B2B use cases in emerging markets. The project forms part of a national digitalization initiative and could serve as a model for further railway projects across the African continent. Philippe Baudrier, Eutelsat's Vice President for Africa, views the deal as a deepening of the collaboration with Airtel.

Analyst Caution Amid Potential

Market experts are responding with caution to the current situation. Although the average price target of around €2.69 suggests substantial theoretical upside, the majority of analysts maintain only a "hold" rating. The focus has now shifted squarely to operational execution. Eutelsat must demonstrate that the time bought through the capital increase is used effectively to build sustainable cash flows.

The regular trading restart on January 2nd will reveal whether the €1.70 level can be defended. While the operational news supports the broader strategy, the massive increase in share count remains the dominant pricing factor. For a fundamental re-rating to occur, management must now consistently deliver profitable applications like the one in Gabun.