SpaceX launched a satellite rally on the stock market: Huge price increases in Europe

The share prices of listed companies in the satellite industry have accelerated in recent weeks, after a considerable rally Elon Musk’s led by SpaceX announced that it is moving forward with its long-awaited and massive IPO in the United States.

French Eutelsat Communicationsin the stock has risen by 25 percent in a week and was up more than 40 percent in the week before Friday. Since the beginning of the year, the price has now risen by more than 120 percent, although before the turn of the year the price fell clearly.

Eutelsat owns and operates satellites and specializes in video broadcasts and data connections. The company is one of the world’s largest satellite companies.

“We are already quite positive about Eutelsat, because the company’s satellite network is a strategic advantage for European defense and the company’s balance sheet has strengthened”, vice president of analysis company Alphavalue Laurent Lamagnere commented to Bloomberg.

Eutelsat’s share has fallen in the previous four calendar years. The company recently raised 1.5 billion euros in additional funding, which eased the debt burden, but a Bloomberg analyst Aidan Cheslinin according to the company, there is “intense competitive pressure”, as SpaceX also wants the same market with its Starlink satellites and Amazon’s satellite-based Leo that provide high-speed network connections.

According to Bloomberg, Eutelsat has no buy recommendations from analysts at all.

For investors, it can be an investment in the defense sector, which can benefit significantly from rising defense budgets in Europe.

Among the European satellite companies, at least the Luxembourgish one and also the one listed on the Paris stock exchange have jumped up significantly in recent weeks SES and German OHB.

OHB, whose name stands for Orbitale Hochtechnologie Bremen, has risen particularly strongly. Its share price has almost doubled in a month and advanced by about 20 percent in a week. Since the beginning of the year, OHB’s share has increased fivefold to its current value of around 600 euros. In three years, the increase has already accumulated to 1,700 percent.

The website Undervalued Shares says About OHB’s story, that the company was shaped in the early years of the 21st century from a component supplier to a producer of complete systems after receiving a contract to implement the intelligence system of the German Defense Forces. Capital investor in 2023 KKR acquired a minority ownership of almost 30 percent in OHB, for which KKR paid a handsome premium of 44 euros per share.

OHB’s order books have swelled by 45 percent in a year to 3.3 billion euros, and the profit margin has shrunk from four to six percent in a couple of years. Now the goal is to accumulate an average of three billion euros in new orders every year thanks to additional appropriations from the European Space Agency, the EU and the defense of European countries.

The share of Luxembourg-based SES also seems to have clearly benefited from the approaching listing of SpaceX. SES’s stock has risen by about 15 percent in a week, by more than 30 percent in a month, and by more than 50 percent since the beginning of the year. According to its website, SES operates around 120 satellites.

The listing of SpaceX has caused the prices of satellite companies to rise sharply in the United States as well. There about the companies in the industry, for example Satellogic’s the course has increased fivefold since the beginning of the year. Bank of America has even put together a stock basket that follows 35 companies in the industry, which has risen 40 percent this year and left the largest stock indexes, the S&P 500 and the Nasdaq 100, well behind in return.

This week, SpaceX submitted an official IPO application in the United States, where the company is aiming for the Nasdaq stock exchange. In the listing, the company aims for 75 billion dollars in funding and a total valuation of 1750 billion dollars, which would place the company directly in the top group of the world’s most valuable listed companies.