Drax boosts renewables output, dividend and buybacks as new CfD underpins growth push

Drax Group plc ( (GB:DRX) ) has issued an announcement.

Drax reported record renewable generation in 2025, supplying 6% of UK power and 11% of its renewables, alongside a 5% rise in pellet output, while adjusted EBITDA dipped to £947m and operating profit fell sharply due to a £378m impairment. The group strengthened its balance sheet, lifted its dividend by 11.5%, completed a £300m buyback and began a new £450m programme, underpinned by a new low carbon dispatchable contract that supports long-term UK energy security and visibility of earnings.

Management outlined a strategy targeting £600m–£700m in annual adjusted EBITDA post-2027 and about £3bn of free cash flow from 2025 to 2031, with over £1bn earmarked for shareholder returns and up to £2bn for growth in flexible, renewable generation and battery storage. Drax is also developing data centre and battery projects at its 4GW power station site and pursuing cost savings of more than £150m a year from 2027, moves that could reinforce its role in the energy transition and position it to benefit from rising system flexibility needs and AI-related power demand.

The most recent analyst rating on (GB:DRX) stock is a Sell with a £680.00 price target. To see the full list of analyst forecasts on Drax Group plc stock, see the GB:DRX Stock Forecast page.

Spark’s Take on GB:DRX Stock

According to Spark, TipRanks’ AI Analyst, GB:DRX is a Outperform.

Drax Group plc’s strong financial performance, particularly in cash generation and profitability, along with positive technical indicators and a favorable valuation, contribute significantly to its overall score. The company’s strategic initiatives, including share buybacks and government agreements, further bolster its market position. However, challenges in revenue growth and market dynamics in the pellet sector pose risks that need careful management.

To see Spark’s full report on GB:DRX stock, click here.

More about Drax Group plc

Drax Group plc is a UK-based renewable energy company focused on biomass generation, pumped storage, hydro and other flexible power assets. It also operates a North American biomass pellet production business and is expanding into battery energy storage systems and energy optimisation services to support UK energy security and the broader energy transition.

Average Trading Volume: 1,274,975

Technical Sentiment Signal: Buy

Current Market Cap: £2.95B

For a thorough assessment of DRX stock, go to TipRanks’ Stock Analysis page.