Eutelsat's Military Boost and FCC Gamble Collide as Shares Swing Wildly
Published on 07/01/2026 at 06:07 | Redaktion boerse-global.de
The satellite operator Eutelsat is navigating a turbulent period defined by a lucrative military contract, a costly network overhaul, and the prospect of a massive compensation payout from US regulators. While the company's strategic pivot towards low-earth orbit (LEO) services and defence revenue is gaining traction, its share price has suffered a brutal selloff, sliding nearly 37% in the past month to close at €2.44. On the final day of its fiscal year 2025/26, however, the stock rebounded 5.7% to €2.43, driven by news of a major order from the French military.
That contract, awarded under the CENTAURE project by France's defence procurement agency, is worth up to €350 million over eight years. The first four years carry a committed sum in the triple-digit millions, with initial payments already flowing in the current fourth quarter. Eutelsat is being deliberately positioned by Paris and London as a European counterweight to Elon Musk's Starlink, and the US Department of Defense has also been a strong buyer of its services despite fierce competition. The company's total order book now stands at €3.4 billion, with over half tied to the rapidly growing connectivity segment.
Yet the financial strain remains acute. Eutelsat is ploughing roughly €900 million into expanding its LEO network this year, and total capital expenditure is projected to reach around €4 billion by 2029 – half of that earmarked for the second generation of OneWeb satellites, with the first 440 units scheduled for delivery by year-end. The group's net debt is expected to hit 2.7 times operating profit by mid-2026. Meanwhile, the legacy video business continues to contract: third-quarter video revenue fell 13% to €128 million, dragged down by sanctions on Russian broadcasters, prompting Eutelsat to shrink its geostationary fleet to 31 satellites. Overall quarterly revenue edged up to €293 million, powered by a 65% organic surge in LEO services, which now account for a fifth of total sales.
Should investors sell immediately? Or is it worth buying Eutelsat?
A separate high-stakes regulatory development could provide a major cash infusion. The US Federal Communications Commission (FCC) plans to auction parts of the upper C-band in 2027 to free up spectrum for future mobile networks, requiring Eutelsat to vacate frequencies it currently uses. The company estimates the clearing cost at roughly $750 million, though a binding FCC payment schedule has yet to be set. Past experience offers reason for optimism: satellite operators received billions in accelerated relocation incentives during the first C-band clearing. A favourable settlement would significantly ease the balance sheet pressure.
The stock's extreme volatility – annualized at 106% – reflects the tension between these catalysts and the heavy investment burden. After trading at €4.62 as recently as late May, the shares have since lost nearly half their value. The next decisive milestone will be the publication of detailed FCC auction rules, which will clarify exact compensation amounts and deadlines. Until then, investors are left weighing a promising order book and military backing against a punishing debt trajectory and the high cost of orbital renewal.
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