A Major Shareholder’s Vote of Confidence in Eutelsat

Recent equity dilution at the satellite operator Eutelsat had unsettled its investor base. However, a clear signal has now emerged from a key insider, potentially marking a pivotal moment. A substantial investment of nearly €120 million from a major shareholder is providing crucial support to the share price, raising questions about whether a sustainable recovery is now taking shape.

Despite recent gains, Eutelsat's shares remain at historically low levels. The current price around €1.71 represents a premium of approximately 26% over the recent rights issue price of €1.35. This uplift occurs against the backdrop of a significantly expanded share count, with nearly 500 million new shares issued. The capital raised is primarily earmarked for reducing net debt to a target of 2.5x EBITDA by 2026 and funding the Gen-2 constellation for OneWeb.

From a technical perspective, the equity is approaching a critical juncture. To unlock further recovery potential, the stock must convincingly break through the resistance level at €1.75. A sustained move above this point would bring the €2.00 mark into focus. On the downside, the zone between €1.60 and €1.62 now serves as a key support area that needs to be defended, as the market awaits tangible revenue from new, substantial military contracts.

Strategic Insider Purchase Bolsters Position

The most significant development is the substantial share purchase by anchor shareholder Bharti Space Limited. The company, which holds a seat on the Board of Directors, acquired approximately 88.7 million Eutelsat shares. The purchase price of €1.35 per share aligns exactly with the level set during the recent rights offering.

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

This transaction increases Bharti Space's stake to 17.88% of the capital, cementing its position as the second-largest shareholder behind the French state. Market observers interpret this move as a strong indication that the strategic partner views the current share price as fundamentally attractive following the dilution and sees compelling long-term potential.

Analyst Sentiment Shifts on Improved Financials

The strengthened balance sheet is also influencing analyst ratings. JPMorgan upgraded its view on the stock from "Underweight" to "Neutral," citing the successful €1.5 billion refinancing. The injection of fresh capital has alleviated immediate balance sheet concerns, thereby limiting downside risk. This revision follows similar reassessments by Deutsche Bank and BNP Paribas, which had previously revised their more skeptical stances.

Operational developments support this improving narrative. A memorandum of understanding with the Canadian firm Clear Blue Technologies focuses on power supply solutions for the Konnect WiFi service across Africa. While the initial volume of 1,000 units may not immediately move the needle financially, the agreement underscores the company's strategy to better monetize its combined LEO and GEO assets in emerging markets.