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Drax Group plc ( (GB:DRX) ) has provided an announcement.
Drax has provisionally secured 434MW of capacity agreements, de-rated to 399MW, mainly from its Cruachan pumped storage units, Lanark and Galloway hydro schemes, and small legacy gas turbines. The contracts, running from October 2029 to September 2030 at a provisional clearing price of £27 per kW per year and expected to generate about £11 million, extend the revenue visibility of these assets beyond existing agreements already in place to September 2029, reinforcing Drax’s role in UK capacity provision and grid reliability.
The new agreements supplement the company’s current contracted positions, further underpinning long-term earnings from its flexible generation portfolio. This outcome highlights the continuing importance of pumped storage and hydro assets in the UK Capacity Market as the system seeks dependable low-carbon capacity to back up an evolving power mix.
The most recent analyst rating on (GB:DRX) stock is a Sell with a £720.00 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 Neutral.
The score is driven primarily by mid-range financial performance (strong cash generation and manageable leverage but weaker recent profitability) and supportive technicals (trading above key moving averages with neutral momentum). Valuation metrics are very favorable on the provided P/E and dividend yield, while the earnings call adds a positive tilt from reiterated multi-year free cash flow and shareholder returns, tempered by impairments and near-term earnings pressure under the new CfD regime.
To see Spark’s full report on GB:DRX stock, click here.
More about Drax Group plc
Drax Group plc is a UK-based energy company focused on power generation, including pumped storage, hydroelectric assets, and legacy gas turbines. The company plays a role in providing reliable electricity capacity to the UK grid through participation in the Capacity Market, supporting system stability and security of supply.
Average Trading Volume: 1,258,338
Technical Sentiment Signal: Buy
Current Market Cap: £2.94B
For a thorough assessment of DRX stock, go to TipRanks’ Stock Analysis page.