Street Calls of the Week
Investing.com - Deutsche Bank has resumed coverage on SES SA (PARIS:SESG) with a Buy rating and a price target of EUR10.00 following the company’s Intelsat deal. The stock has shown remarkable momentum, delivering a 152% return year-to-date, while InvestingPro analysis indicates the stock is currently undervalued.
The bank’s analysis of the F-4 registration document reveals expectations for organic topline growth at a 2.3% CAGR, compared to SES’s fiscal year 2024 projection of approximately -1%.
Deutsche Bank anticipates approximately 300 basis points of margin expansion in the near term, supported by synergies from the Intelsat acquisition, though limited pro-forma financials are currently available.
The bank notes SES offers a dividend yield of approximately 8%, which it considers well-covered by free cash flow to equity in the mid-term, with InvestingPro data showing an impressive 27-year streak of consistent dividend payments and a substantial free cash flow yield of 31%. The spectrum option value accounts for roughly 25% of the company’s market capitalization.
Deutsche Bank acknowledges market focus will be on execution but believes SES can deliver growth and cash return upside with approximately 30% capacity increase. Access the complete financial health analysis and 12 additional exclusive insights through InvestingPro’s comprehensive research report.
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