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On Friday, Kepler Cheuvreux analyst Alessandro Cuglietta revised the rating for SES SA, a satellite operator listed on Euronext (EPA:ENX) Paris (SESG:FP) and over-the-counter in the United States (OTC: SGBAF), from "Hold" to "Buy." The firm also increased the price target for SES stock from €5.00 to €7.80. According to InvestingPro data, SES has demonstrated strong momentum with an impressive 86.64% year-to-date return, while maintaining dividend payments for 27 consecutive years.
Cuglietta’s upgrade is based on several factors that are anticipated to benefit SES. The company is poised to gain from increased European defense spending and its participation in the European Union’s IRIS² project. Kepler Cheuvreux has raised its sales and EBITDA margin forecasts for fiscal year 2030, reflecting expected stronger growth in the Government and Connectivity sectors. The company currently generates $2.07 billion in revenue with a robust EBITDA of $1.04 billion. InvestingPro analysis shows the company maintains a strong financial health score of 2.7, indicating good operational stability.
The analyst expects SES to rapidly reduce its debt following the acquisition of Intelsat, attributing this to the company’s robust free cash flow (FCF) generation and the anticipated synergies from the merger. Additionally, Cuglietta estimates that SES could receive between $1.5 billion and $4 billion from the upcoming C-band spectrum auction.
The revised price target of €7.80 reflects the analyst’s positive outlook on SES’s future financial performance. In the statement provided, Cuglietta recommends that investors take advantage of this opportunity, describing SES as an attractive defense play with an angle of European Union sovereignty.
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