Jefferies tips Inmarsat on read-across from AirAsia connectivity deal

13th Jul 2016 14:45

(ShareCast News) - Broker Jefferies reiterated its 'buy' recommendation on Inmarsat, sparked by reports that AirAsia has chosen the satellite company as a 'connectivity provider' for the carrier's newly announced Airbus fleet.AirAsia announced at the Farnborough Air Show on Tuesday that it had ordered 100 A321neo planes from Airbus, with industry experts suggesting on social media that an "L-band" service has been chosen for the in-flight connectivity."Given AirAsia has been working with roKKi since 2014 for its in-flight connectivity service, and roKKi is powered by Inmarsat's SwiftBroadband service, it appears to us that Inmarsat has been chosen," Jefferies said.This gives welcome visibility on medium term L-band growth for the FTSE 250 company."While not a plank to the all-critical Global Xpress revenue guidance, it is nonetheless welcome visibility on future growth," analysts said, with it positioning Inmarsat well with AirAsia for the point at which the carrier looks to move to a higher throughput service.Jefferies set a 1,245p price target on Inmarsat's shares, well above their near-800p level on Wednesday.