SES (Q+A) | Buy | C-band windfall: what is it worth and how much will reach shareholders?

Research evidence excerpt

SES (Q+A) | Buy | C-band windfall: what is it worth and how much will reach shareholders?

et debt trajectory and applying the 3.0x distribution threshold, we estimate a Dividend yield 6.6% 6.6% 6.6%

theoretical distributable amount of approximately EUR2,324m, or EUR5.6/share. ND(F+IFRS16)/EBITDA 3.8 3.7 3.5

▪We raise our target price from EUR9.00 to EUR10.50, driven by: a higher core DCF of GearingROIC 210.0%1.0% 238.5%1.6% 259.2%2.9%

EUR6.30/share (vs. EUR5.60 previously), reflecting lower capex assumptions over FY EV/IC 1.0 1.1 1.1

2026-30E, partially offset by a modestly higher WACC (10.3% vs. 10.1% previously), Sector Most Pref. Sector Least Pref.

and an increased C-band risk-adjusted present value of EUR4.20/share (vs. EUR3.40 Informa M6 Métropole télévision

previously), reflecting our base case upgrade from 140MHz to 160MHz. MTG Ubisoft

Publicis Groupe Verve Group

▪At the current share price, our TP implies 39% upside, with additional asymmetric RELX PLC

upside in the bull-case scenario. Including EUR0.50/share in annual dividends Wolters Kluwer

through 2030 and EUR5.6/share in theoretical C-band distributions, we estimate a

total return of approximately 107% and an annualised IRR of approximately 17%

based on current levels. We reiterate our Buy rating.

Research Framework

Investment case Valuation methodology

n With Europe’s wake-up call on Defence autonomy and n Our 12M forward TP is obtained from our DCF model, in

desire to build a sovereign satellite communication which we use an 10.3% WACC and 0.0% terminal growth.

infrastructure, we expect SES to benefit from rising n Our DCF yields a fair value of EUR6.30 per share for the core

demand from governments and companies for its MEO business, to which we add EUR4.20 per share for C-band

capacity. monetisation.