Telesat initiated with a Hold at Deutsche Bank

Deutsche Bank initiated coverage of Telesat with a Hold rating and $9 price target. The company competes in broadcast and enterprise services but is embarking on a “massive transformation” to become a low earth orbit constellation operator which is being heavily supported by the Canadian government, the analyst tells investors in a research note. The firm says the company’s geostationary equatorial orbit business faces secular headwinds in both broadcast and enterprise, leading to a large drop in revenue and EBITDA this year. Moreover, there will be a massive step-up in capex to fund and build Lightspeed, adds Deutsche Bank.