Eutelsat: shares fall with Goldman Sachs downgrade

(CercleFinance.com) - Eutelsat shares fell in Paris on Monday, hit by Goldman Sachs downgrading its rating on the satellite operator to "neutral" (from "buy").


At just after 10 am, the share price was down over 3%, underperforming a pretty flat market (SBF 120 index -0.1%).

Goldman Sachs which has slashed its target price for the share from E14 to E4, says that it is concerned about the impact of the acquisition of OneWeb and the intensification of competition on the group's profitability.

"The new venture into LEO technology comes with structurally high fixed
costs in an environment of ramping competition", they said.

"In addition, FCF delivery over the medium term remains heavily exposed to
execution risk on both capital allocation and timing, as well as rising
interest costs", Goldman warns.

As such, analysts say that they see only "limited" upside potential for the stock.



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