Deutsche Bank upgrades SES on growth from Intelsat merger

SES SA

02/10/2025 12:08

** Deutsche Bank resumes coverage of Luxembourg-based satellite operator SES SESFd.PA with a "buy" rating, citing growth and margin upside from its Intelsat deal

** The broker's new model for the combined firm shows organic topline growth of 2.3% annually, a reversal from SES's standalone forecast of about 1% decline in FY 2024

** DB expects near-term margin expansion of around 300 basis points for the new entity, supported by anticipated synergies from the acquisition of competitor Intelsat

** A dividend yield of around 8% is seen as attractive and well covered by the company's free cash flow to equity over the medium term, the brokerage adds

** While market focus will be on execution, DB believes the deal's c.30% capacity increase can deliver growth and cash return upside for the new combined company

** Shares up 4.5% at 1040am GMT, on track for their best day since June

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 (Reporting by Hugo Lhomedet)

 ((hugo.lhomedet@thomsonreuters.com))