In a report released today, from Stifel Nicolaus reiterated a Sell rating on Eutelsat Communications, with a price target of €2.40.
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Stifel Nicolaus has given his Sell rating due to a combination of factors impacting Eutelsat Communications. The company’s Q1 FY26 revenues showed a decline of 1.2% organically year-over-year, falling approximately 4% below consensus expectations. This underperformance was primarily driven by a sharper-than-expected decline in Video revenues and pressure on GEO Connectivity. Despite the growth in LEO Connectivity and government services, these areas were not enough to offset the overall revenue shortfall.
Management’s guidance for FY26 suggests flat operating revenues year-over-year, which implies a significant ramp-up in Connectivity revenues is necessary throughout the year. This outlook appears challenging, particularly given the reliance on the timing of contracts such as the French Ministry of Defense. Additionally, the Video segment’s decline is now anticipated to be in the mid-to-high single digits, further contributing to the cautious outlook. As a result, Stifel Nicolaus maintains a Sell rating, reflecting concerns over Eutelsat’s ability to meet its full-year targets amidst these headwinds.