Charles Stanley upgrades Inmarsat on long-term growth potential

Charles Stanley upgraded Inmarsat to ‘accumulate’ from ‘reduce’.

“The Q3 results were slightly ahead of expectations. Now that the risks associated with the third satellite launch have disappeared, and reflecting the company’s long-term growth in a world likely to be short of it, we are upgrading,” it said.

It noted the company has now launched all three necessary satellites for its Inmarsat-5 constellation and Global Xpress technology which uses a new part of the spectrum and lays the foundations for the next five years of growth, and is progressing with other businesses as well, such as S-band technology in Europe.

In addition, the brokerage pointed to a very positive capital markets day presentation last month on growth programmes.

It said the valuation is demanding, there remain risks on competition and execution, and the share may well be volatile between now and the two-year recommendation horizon.

“However, we believe that the upgraded medium term outlook, to be presented with the prelims in March, will be positive for the share price.”

At 1450 GMT, Inmarsat shares were up 3.7% at 1,009p.