Eutelsat Shares Show Signs of Stabilizing After Turbulent Period

After enduring weeks of significant selling pressure driven by corporate actions and the departure of a major investor, Eutelsat's stock is finally exhibiting signs of a potential turnaround. Shares closed the week with a notable 4% gain, reaching €1.71. This movement raises a critical question for the market: has the dilution-related selling finally exhausted itself, or is this merely a temporary pause in a longer downtrend?

The trading session on Friday represented a meaningful shift in sentiment. The advance from €1.64 to €1.71 suggests that the market has, for now, absorbed the new shares issued from the recent capital increase. This indicates the aggressive price discovery phase may be over. Market observers interpret this as a technical signal that investor attention is pivoting away from concerns over liquidity and back toward assessing the operational prospects of the restructured satellite operator.

The Restructuring Priced In

The heightened volatility witnessed in December was a direct consequence of a fundamental balance sheet repair. The current share price of €1.71 is now seen to reflect several key developments:

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

• Successful Capital Raise: The company secured approximately €1.5 billion in fresh equity. This funding is projected to reduce the group's leverage ratio to around 2.5x EBITDA.
• SoftBank's Exit: The Japanese investment giant offloaded a substantial portion of its subscription rights in early December, an action that placed intense, albeit temporary, pressure on the share price.
• Analyst Upgrade: In response to the secured financing, Deutsche Bank revised its stance on the stock, moving it from "Sell" to "Hold." The bank cited the alleviation of immediate financial distress risk due to the newly acquired capital.

From Survival to Execution

With its financial footing stabilized, the narrative surrounding Eutelsat is transitioning from survival to execution. The core challenge now lies in the successful integration of the OneWeb Low Earth Orbit (LEO) satellite constellation. Strategic milestones, such as embedding these new capacities into the service portfolios of major telecommunications partners like Orange, are viewed as essential for the company to effectively compete with rivals like Starlink.

While the immediate downward risk from the rights trading has subsided, with the €1.70 level acting as a short-term support zone, a sustained recovery is not yet guaranteed. For a durable trend reversal to take hold, Eutelsat's management must demonstrate that its multi-billion euro investment in the LEO network will begin generating the forecasted cash flows from 2026 onward.