UPDATE: Deutsche Bank Initiates Coverage on Intelsat SA with Hold Rating, $26 PT on Fair Valution

In a report published Tuesday, Deutsche Bank analyst Doug Mitchelson initiated coverage on Intelsat SA I with a Hold rating and $26.00 price target. In the report, Deutsche Bank noted, “Intelsat is the industry leader and enjoys all of the favorable characteristics of a fully scaled FSS operator as well as benefits from an advantaged tax structure that puts its cash tax burden at ~11% of pre-tax income in our forecast. With Intelsat now at $24.41/shr, we show the stock valued at 8.6x '13E EV/EBITDA vs. comps SES at 7.9x and ETL at 7.6x. We believe this premium is appropriate and reflects Intelsat's tax advantage and leadership position, though Intelsat is approaching fair value according to our DCF valuation methodology and we would not expect this relative premium to expand further. With 6% upside to our $26/shr DCF target price, a Hold rating is appropriate.” Intelsat SA closed on Friday at $24.41.