Eutelsat's Bold Move: Securing Europe's Tech Sovereignty in the Satellite Arms Race

The European satellite sector is at a crossroads, driven by geopolitical tensions, technological rivalry, and a scramble for control of critical communications infrastructure. At the epicenter of this transformation is Eutelsat, a Franco-European satellite giant that has just executed a landmark capital raise to position itself as the continent's tech sovereignty champion. With France's state-owned stake rising to nearly 30% and strategic investors like Bharti and CMA CGM onboard, Eutelsat is betting big on Low Earth Orbit (LEO) connectivity—a move that could redefine European self-reliance in space and telecom.

Geopolitical Tech Sovereignty: Why Europe Needs Eutelsat

The EU's IRIS² program, a €2 billion initiative to build a sovereign multi-orbit satellite network, is the linchpin of its tech sovereignty push. Designed to rival SpaceX's Starlink, IRIS² aims to ensure secure, military-grade communication for governments and critical infrastructure. France's deepening stake in Eutelsat—now at 29.99%—is no accident: it's a strategic play to anchor European control over the skies.

The urgency stems from U.S. policies under President Trump, who has weaponized space infrastructure. When Maxar cut Ukraine's access to satellite imagery in 2025, it exposed Europe's vulnerability. Eutelsat's Nexus program, a 10-year, €1 billion deal with France's armed forces, directly addresses this by blending civilian and military assets to safeguard defense communications.

Undervalued Stock Amid Strategic Pivot

Despite its pivotal role, Eutelsat's stock is undervalued. Its market cap of $1.55 billion (as of June 2025) reflects a -20.92% year-over-year decline, though it's up 21.68% since December 2024. The disconnect between its stock price and strategic ambitions is stark.

Key metrics paint a compelling picture:
- Revenue targets: €1.5–1.7 billion by 2028–29, driven by LEO B2B/B2G (business-to-government) markets growing at a 28% CAGR.
- EBITDA margins: Expected to hit 60%+ by 2028–29, leveraging LEO's scalability.
- LEO fleet: Over 600 satellites today, with plans to expand to 940+ by 2026, positioning it as a LEO leader alongside OneWeb (now under Eutelsat's wing).

The recent €1.35 billion capital raise, priced at a 32% premium to its 30-day VWAP, signals investor confidence in Eutelsat's pivot from traditional geostationary (GEO) satellites to LEO dominance. This infusion will slash leverage to 2.5x by 2025–26, freeing cash flow for IRIS² and defense contracts.

Sector Consolidation: Eutelsat as a Consolidator

The telecom sector is undergoing a merger-and-acquisition frenzy, and Eutelsat is both beneficiary and driver. Its acquisition of OneWeb—a $4.7 billion bet—creates a hybrid LEO-GEO powerhouse. Meanwhile, the SES-Intelsat merger (valued at $3.1 billion) aims to rival U.S. giants.

Eutelsat's advantage? Geopolitical tailwinds. The EU's NATO Satcom procurement, a €1 billion, 15-year deal for pooled satellite services, favors European operators. Eutelsat's hybrid network and government partnerships (e.g., France's Nexus) make it the go-to partner for sovereign projects.

Risks to Monitor

• Execution delays: Scaling LEO fleets and integrating OneWeb's satellites could strain resources.
• Regulatory hurdles: IRIS²'s multi-orbit model faces EU competition scrutiny to avoid monopolies.
• U.S. competition: Starlink's global reach and SpaceX's funding flexibility remain threats.

Investment Recommendation: Buy the Dip

Eutelsat's stock is trading at a discount to its strategic value, with geopolitical tailwinds and sector consolidation favoring its growth story. The 32% premium in its capital raise underscores investor confidence in its ability to capitalize on the LEO boom.

Positioning Strategy:
- Buy: Accumulate shares at current levels, targeting a 12–18 month horizon.
- Watch for catalysts: IRIS²'s 2027–28 launch, OneWeb integration milestones, and defense contract wins.
- Risk management: Set a stop-loss below recent lows (e.g., $2.50) to protect against volatility.

Conclusion

Eutelsat is not just a satellite operator—it's a linchpin of Europe's tech sovereignty ambitions. With France's backing, a fortress balance sheet post-capital raise, and a clear path to LEO dominance, its undervalued stock offers a rare chance to bet on the continent's next tech giant. As the sky becomes the next battleground for geopolitical influence, Eutelsat is primed to win.

Investment thesis: Eutelsat (ETL.PA) is a buy for investors willing to capitalize on European tech sovereignty and LEO growth, with risks mitigated by strategic partnerships and geopolitical tailwinds.