Barclays Capital pushed shares in satellites operator Inmarsat Plc (LON:ISAT) out of orbit today, downgrading them despite the firm recently reporting a “solid set” of first-quarter numbers.
The broker cut its stance on the FTSE 250-listed firm to ‘underweight’ from ‘equal-weight’ while raising the target price to 750p from 710p and upping estimates.
That was still well below Inmarsat’s current share price of 774p, which was down over 6%, or 50.5p in mid-morning trading, curtailing a post-update rally.
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In a note to clients, BarCap’s analysts said: “With the stock having recovered from its lows, the valuation now looks unappealing.”
They noted that Inmarsat’s first-quarter results made “for a second consecutive positive print.”
The analysts added: “Combined with GX contract announcements over the past six months, we see ISAT well set for a revenue recovery and to meet its 2017-18 guidance.”
“However,” they continued, “our midterm concerns remain: supply is set to increase materially whilst demand growth should be more volatile; technological obsolescence is a question mark with VHTS around the corner (V-2 launch expected in June).”