Street Calls of the Week
Investing.com -- Deutsche Bank resumed coverage of SES with a “buy” rating and a target price of €10.
Shares of the satellite telecommunications operator were up 3.6% at 08:21 ET (12:21 GMT).
Analyst Roshan Ranjit said that following the Intelsat deal, SES is positioned for topline growth.
A review of the F-4 registration document and a new SES+Intelsat model indicates organic topline growth at a compound annual growth rate of 2.3%, compared with a decline of about 1% for SES in fiscal year 2024.
Although limited pro forma financials are available, more details are expected in the coming weeks. The analysis highlighted potential for about 300 basis points of near-term margin expansion supported by synergies.
Dividend yield of about 8% was described as well covered by free cash flow to equity in the medium term. Spectrum option value was estimated to account for about 25% of market capitalization.
Ranjit said market focus will remain on execution, but with an increase of about 30% in capacity, SES has room to deliver growth and cash return upside.