Telesat Stock Rallies After CIBC Cites Undervalued Lightspeed Project

Shares of Telesat (TSAT) rallied 5.6% in mid-day trading after Canadian investment bank CIBC initiated coverage of the satellite operator with an "Outperformer" rating and a CAD$105 price target, according to a note published over the weekend.

Analyst Cites Valuation Gap

The core of CIBC's bullish thesis is a perceived valuation gap for Telesat's flagship Lightspeed low Earth orbit (LEO) satellite constellation. The bank's analysis suggests the market is currently assigning an equity value of approximately CAD$5.6 billion to the project.

In contrast, CIBC's own base-case model values the Lightspeed constellation at CAD$9.5 billion. The bank highlighted several key strengths underpinning its valuation, noting that the 225-satellite network is fully funded and has already secured a significant backlog and a major government contract before its planned service launch.

Key Lightspeed Metrics

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• Service Backlog: The project has amassed a $5.6 billion backlog ahead of commercial operations.
• Anchor Contract: Telesat holds a 15-year, CAD$2.7 billion contract with the Government of Canada.
• Service Target: Commercial service is targeted to begin by the end of the first quarter of 2028.

Market Context

The analyst-driven momentum was amplified by a broadly positive market environment. The S&P 500 gained 0.6% and the Nasdaq Composite rose 0.8% as investors positioned for a week of major corporate earnings reports and a Federal Reserve policy decision.

This supportive risk-on tone, combined with investor anticipation for Telesat's upcoming Q3 2026 earnings call on October 29, provided a constructive backdrop for the stock's sharp advance following the CIBC initiation.