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Investing.com -- Shares of SES SA (EPA:SESG) tumbled by 4.4% as Moody’s (NYSE:MCO) Investors Service shifted its outlook on the satellite operator to negative from stable, while affirming its Baa3 rating.
The market’s reaction reflects concerns about the company’s debt load, especially in light of the upcoming Intelsat deal closure expected in the second half of 2025.
Moody’s decision comes amid a challenging environment for satellite communications, with SES’s competitor Intelsat reporting lower than expected EBITDA for 2024, and increasing competition from non-geostationary satellite services like Starlink.
The credit rating agency’s report highlighted the risk of a shift in the competitive landscape, which could potentially alter pricing dynamics within the industry.
Despite the negative outlook, SES has attempted to mitigate investor concerns by providing an update indicating that its adjusted EBITDA for 2024 is projected to exceed expectations. This suggests that the company is taking proactive steps to strengthen its financial performance despite the challenges.
Barclays (LON:BARC) commented on the situation, stating, "We see a name with competitive risks that are hard to ignore, but also possible C-band benefits."
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