Intelsat’s Price Target Trimmed by RBC to $6

Intelsat (I) received a slight reduction to its price target Thursday from RBC Capital Markets, which cited weak performance in the satellite-services company’s network-services business.

The new price target is $6 per share, down from $6.25 and below the stock’s Wednesday closing price of $6.26. RBC kept its investment rating on the stock at outperform with a speculative-risk qualifier.

In a note to clients, RBC highlighted Intelsat’s recent filing with the Federal Communications Commission, in which the company joined with Intel (INTC) to ask the regulator for permission for satellite operators to give the use of C-band spectrum to terrestrial wireless operators in certain areas of the US.

Calling the filing “a very interesting new development for beleaguered Intelsat investors,” RBC said Intelsat’s “suggestion that it could effectively auction some of its 500 MHz of available C-band frequency in the US for 5G use could be very value enhancing.” The firm estimates this could be worth about $1.7 billion, or $14 per share.

However, RBC noted short-term trading has been “poor,” and the company’s Epic satellites have been ramping more slowly than expected. The firm said its price-target cut reflects weak performance in its network-services business, and noted the price target doesn’t include the potential C-band spectrum.

Leave A Reply

Your email address will not be published.