Eutelsat shares skyrocket amid contract uncertainty for Starlink
Eutelsat shares have experienced a dramatic surge, climbing over 150% this week. This surge is fuelled by geopolitical developments that raise the possibility of Eutelsat’s OneWeb satellites replacing Elon Musk’s Starlink in Ukraine.
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The French satellite group’s market value has nearly tripled since Friday, following a public disagreement between Ukrainian President Volodymyr Zelensky and former US President Donald Trump, casting doubt on Starlink’s continued presence in Ukraine.
“Shares are up on the prospect of switching the Ukrainian army’s contract from Starlink to Eutelsat’s OneWeb and overall on the fact that OneWeb is the best like-for-like alternative to Starlink,” stated Stephane Beyazian, analyst at Oddo BHF.
A White House official’s anonymous statement about a potential pause in US military aid to Ukraine, coupled with the European Commission’s proposed €800 billion defence plan, has further bolstered Eutelsat’s prospects.
Eutelsat has reinforced its commitment to enhancing European satellite autonomy and providing internet access to Ukraine. “Yesterday’s remarks by Eutelsat (they are committing additional satellite capacity to the region) highlights its importance for European defence capabilities,” noted ING analyst Jan Frederik Slijkerman.
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Previously, the European satellite industry faced scepticism due to strong US competition, despite the European Commission’s support for the Iris² satellite constellation.
Eutelsat has struggled to maintain investor confidence amidst debt concerns and fierce competition from SpaceX’s Starlink. In February, its shares hit record lows after forecasting further losses from geostationary satellites. “Investors were heavily short on Eutelsat shares due to its heavy cash burn,” explained Beyazian. The recent geopolitical changes have caused a dramatic reversal of fortune.
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