SES

Company Update:
SES has awarded OHB a contract worth almost €1 billion to develop and build satellite platforms for the MEO component of Europe’s €15.6 billion IRIS2 program.

The IRIS² program formally entered its implementation phase in August. The first satellites are expected to be launched in FY 29 and service is expected to start in FY 30.

IRIS^2 forms a critical digital sovereignty program by EU with less and less dependence on US based systems for internet connectivity, surveillance etc.

Eutelsat, SES, and Spain's Hispasat are major satellite operators for the program.

SES looks increasingly attractive at its current valuation as the market again appears to be pricing in limited growth and significant leverage risk, while several potential value unlocks are not fully reflected.

The IRIS² economics are attractive, with SES committing up to €1.35bn of MEO CapEx while targeting at least a 10% IRR.

The newly approved Upper C-band clearing could generate $5.6bn of gross incentive payments to SES, with payments tied to clearing milestones through 2030/31 which would help in quick deleveraging.

With an EV/EBITDA for FY 26E at just 4.92, SES is a screaming buy if you have patience by your side.

Expert Opinion:
Valuation is back to very attractive level for SES with share back below the EUR5 level. Stocks offers a c10% dividend yield. At this valuation level, the risk reward profile is attractive and deploying capital in SES is  worth the risk.

From a financial standpoint, SES confirmed that its portion of the 2026 IRIS² investment fits within its existing CapEx guidance, avoiding dividend cuts or emergency balance-sheet calls. SES will modernize its fleet and while 10% of the capacity is dedicated to EU/sovereign military and government comms, SES can sell the remaining 90% of the capacity generated.  The stream of CF doesn’t kick in before 2030 but provides long term visibility. A stock to buy and hold to play a gradual rerating.