Berenberg has opened coverage of Eutelsat Communications with a Hold rating and a €2 per-share target, concluding that the potential strategic upside from the company's involvement in Europe’s IRIS2 programme is tempered by a heavier investment load and elevated execution risk.
Shares in Eutelsat fell 2.6% to €1.69 on the news, while the wider CAC 40 slipped 0.4%. Berenberg’s €2 target compares with Eutelsat’s September 1 closing price of €1.74 and implies roughly 15% upside to that closing level.
The brokerage said it would shift to a more favourable view if Eutelsat can demonstrate clear and sustained execution, but for now it prefers rival SES.
IRIS2 role and programme approval
Berenberg highlighted Eutelsat’s considerable participation in the IRIS2 SpaceRISE consortium, a mostly EU-funded effort designed to create a European alternative to SpaceX’s Starlink. The consortium received approval on August 7, creating a pathway for Eutelsat to take part in what the bank described as a potential future "European Starlink."
While that strategic position could deliver long-term value, Berenberg underscored that Eutelsat has committed to an additional €2.4 billion of capital expenditure beyond fiscal 2029. The bank tied this extra spending to both IRIS2 obligations and replenishing the company’s OneWeb constellation.
Capex profile and programme expansion
Eutelsat’s previously outlined four-year capex plan through fiscal 2029 remains at about €4 billion, but Berenberg said the scope of the satellite programme has expanded materially. The updated plan now includes an extra 229 OneWeb satellites, and some IRIS2-related spending has been shifted beyond fiscal 2029.
The brokerage stated that the increased investment materially raises execution risk and offsets the benefit of approximately $504 million in C-band spectrum incentive proceeds that Eutelsat expects to receive.
Balance-sheet and earnings outlook
On Berenberg’s forecasts, the extra capital commitments could drive Eutelsat’s leverage toward four times EBITDA, a level the bank said would put additional pressure on the company’s balance sheet. The bank also pointed to a challenging medium-term earnings trajectory.
Eutelsat has set a group revenue target of €1.5 billion to €1.7 billion by fiscal 2029, up from €1.24 billion in fiscal 2026. Berenberg said this revenue goal appears difficult to reach under the current assumptions.
Outlook and investment stance
In sum, Berenberg’s initiation balances the upside of a leading role in the IRIS2 consortium and the replenishment of a sizeable OneWeb fleet against a heavier, time-shifted capital programme and the attendant execution and leverage risks. The brokerage indicated it would become more constructive if evidence emerges of robust execution against the expanded satellite schedule; absent that, it retains a preference for SES.