SES: risks continue; BarCap downgrades to 'sell'
(CercleFinance.com) - The share price of the Luxembourg based satellite operator SES has lost about 40% of its value since early 2017, although Barclays Capital (BarCap) fears that it could fall even further.
Analysts have therefore downgraded their neutral "weight in line" stance towards the stock and now recommend investors sell it ("underweight"). Alongside this downgrade, analysts have cut their target price for the share from 14.3 euros to 11 euros.
BarCap believes that SES 'business is still facing challenges that will threaten its future earnings. In the near term, i.e. 2018 and 2019, BarCap's EBITDA guidance is now 8%-12% below the consensus. In addition, although the consensus expects growth to return after 2019, BarCap expects this growth to be "modest".
In addition, the group's dividend (1.34 euro gross in 2016) would be at risk: BarCap calculates that free cash flow will not be sufficient to cover the cash dividend over the next three years.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
Analysts have therefore downgraded their neutral "weight in line" stance towards the stock and now recommend investors sell it ("underweight"). Alongside this downgrade, analysts have cut their target price for the share from 14.3 euros to 11 euros.
BarCap believes that SES 'business is still facing challenges that will threaten its future earnings. In the near term, i.e. 2018 and 2019, BarCap's EBITDA guidance is now 8%-12% below the consensus. In addition, although the consensus expects growth to return after 2019, BarCap expects this growth to be "modest".
In addition, the group's dividend (1.34 euro gross in 2016) would be at risk: BarCap calculates that free cash flow will not be sufficient to cover the cash dividend over the next three years.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.