Drax Group PLC (GB:DRX)
LSE:DRX
Want to see GB:DRX full AI Analyst Report?
Top Page
Drax Group plc
(LSE:DRX)
Select Model
Select Model
Rating:69Neutral
Price Target:
828.00 p
â–¼(-1.38% Downside)
Action:Downgraded
Date:02/28/26
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.
Positive Factors
Strong cash generation and multi-year FCF target
Consistent operating cash flow and material free cash flow, plus a reiterated GBP 3.0bn 2025–2031 FCF target, create durable capacity to fund dividends, buybacks and disciplined growth. Reliable cash generation reduces refinancing risk and underpins strategic optionality over the medium term.
Negative Factors
Weakened profitability and compressed margins
A sharp drop in net margin and material decline in net income signal reduced earnings quality versus prior years. Persistently lower margins would impair return on equity, limit internal funding for growth, and make cash generation more sensitive to power prices and policy changes over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation and multi-year FCF target
Consistent operating cash flow and material free cash flow, plus a reiterated GBP 3.0bn 2025–2031 FCF target, create durable capacity to fund dividends, buybacks and disciplined growth. Reliable cash generation reduces refinancing risk and underpins strategic optionality over the medium term.
Read all positive factors
Drax Group plc (DRX) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£2.54B
Dividend Yield2.78%
Average Volume (3M)1.09M
Price to Earnings (P/E)28.0
Beta (1Y)0.94
Revenue Growth-11.94%
EPS Growth-84.94%
CountryUK
Employees3,250
SectorUtilities
Sector Strength65
IndustryRenewable Utilities
Share Statistics
EPS (TTM)0.27
Shares Outstanding336,248,900
10 Day Avg. Volume851,735
30 Day Avg. Volume1,088,989
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)0.02
Price to Sales (P/S)0.00551
P/FCF Ratio0.06
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£916.20Price Target Upside9.12% Upside
Rating ConsensusHold
Number of Analyst Covering5
EPS Forecast (FY)0.79
Revenue Forecast (FY)£5.34B
Drax Group plc Business Overview & Revenue Model
Company Description
Drax Group plc, operating alongside its various subsidiaries, primarily focuses on generating renewable energy across the United Kingdom. Its business activities are structured into three distinct divisions: Generation, Customers, and Pellet Produ...
How the Company Makes Money
Drax makes money primarily by generating electricity and selling it into the power market and through contracted arrangements. Key revenue streams include: (1) Power generation revenue: income from selling electricity produced by its generation po...
Drax Group plc Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Positive
The call presented a broadly positive strategic and financial position: strong 2025 operational execution, record renewable and pellet production, robust balance sheet (0.8x leverage) and clear capital allocation plans including shareholder returns and a sizeable growth pipeline (notably >700 MW of BESS and data center optioning). Material negatives were disclosed — notably significant impairments (total ~GBP 385m) tied to the Canadian pellet business and paused projects, workforce reductions, and near-term operational outages — but management framed these as strategic realignment and disciplined capital allocation while emphasizing contracted cash flows from the newly signed low-carbon dispatchable CfD and the growth pathway in FlexGen. On balance, the positive operational and financial momentum, the secured CfD, and the progressing BESS/data center pipeline outweigh the setbacks and one-time charges.Positive Updates
Strong Group Financial Performance
Adjusted EBITDA of GBP 947 million in 2025; adjusted EPS 137.7p, up 7% versus 2024; net debt GBP 784 million representing 0.8x 2025 EBITDA (well below 2x target); total cash and committed facilities GBP 942 million.
Negative Updates
Canadian Pellet Business Challenges and Impairments
Canadian pellet margins deteriorated due to rising fibre costs and constrained supply; recognized an impairment charge of GBP 198 million against the Canadian business and a GBP 139 million impairment for the paused Longview project in Washington.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Group Financial Performance
Adjusted EBITDA of GBP 947 million in 2025; adjusted EPS 137.7p, up 7% versus 2024; net debt GBP 784 million representing 0.8x 2025 EBITDA (well below 2x target); total cash and committed facilities GBP 942 million.
Read all positive updates
Company Guidance
Management reiterated guidance to generate c. GBP 3.0bn of free cash flow between 2025–2031 (c. GBP 0.5bn delivered in 2025), of which it will allocate over GBP 1.0bn to shareholders (inclusive of the ongoing GBP 450m 3‑year buyback) and up to c. GBP 2.0bn to growth; 2025 adjusted EBITDA was GBP 947m, adjusted EPS 137.7p (+7% vs 2024), net debt GBP 784m (0.8x 2025 EBITDA versus a long‑term target of ~2x) and cash & committed facilities GBP 942m, with an expected full‑year dividend of 29p (+11.5%). The group reiterates a post‑2027 adjusted EBITDA target of GBP 600–700m p.a. (pellet production, biomass generation and FlexGen, before development spend), expects structural cost savings of >GBP 150m p.a. by 2027 (vs 2024), and plans continued capital deployment (c. GBP 0.5bn already committed to batteries, GBP 300m committed to battery tolling agreements) while keeping over half of 2026 growth CapEx focused on BESS. Operational and project metrics include record biomass generation of 15 TWh and pellet production of 4.2Mt in 2025, Drax accounting for ~6% of UK power and ~11% of renewables (and >50% of renewables in some low‑wind peaks), use of ~2Mt own pellets from the US South, operational control of >700MW of batteries (260MW acquired from Apatura with an option for +289MW, plus 450MW tolling deals), acquisition of Flexitricity for ~GBP 36m, Cruachan storing >7GWh and running up to 16 hours with a GBP 80m upgrade (2025–27), open‑cycle earnings underpinned by ~GBP 270m of capacity market payments—and noted one‑off charges taken in 2025 (GBP 198m Canadian pellets, GBP 139m Longview impairment and GBP 48m BECCS impairment).Drax Group plc Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
63
Positive
Cash Flow
72
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 5.36B | 6.16B | 8.13B | 7.78B | 5.09B |
| Gross Profit | 1.15B | 1.88B | 1.78B | 1.02B | 891.20M |
| EBITDA | 775.70M | 1.10B | 1.14B | 400.10M | 391.50M |
| Net Income | 73.00M | 526.60M | 562.20M | 85.10M | 55.10M |
Balance Sheet | |||||
| Total Assets | 4.50B | 5.39B | 6.04B | 6.39B | 5.82B |
| Cash, Cash Equivalents and Short-Term Investments | 302.10M | 356.00M | 379.50M | 238.00M | 317.40M |
| Total Debt | 1.08B | 1.29B | 1.56B | 1.59B | 1.49B |
| Total Liabilities | 2.78B | 3.30B | 4.06B | 5.07B | 4.52B |
| Stockholders Equity | 1.71B | 2.08B | 1.97B | 1.31B | 1.29B |
Cash Flow | |||||
| Free Cash Flow | 527.80M | 472.00M | 394.50M | 33.00M | 96.80M |
| Operating Cash Flow | 809.80M | 859.50M | 835.60M | 207.70M | 306.50M |
| Investing Cash Flow | -288.40M | -389.90M | -451.80M | -180.70M | -228.80M |
| Financing Cash Flow | -577.50M | -491.60M | -237.90M | -111.90M | -50.40M |
Drax Group plc Technical Analysis
Negative
839.60
Price Trends
818.48
Negative
839.08
Negative
795.80
Negative
Market Momentum
-19.22
Negative
38.06
Neutral
50.83
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:DRX, the sentiment is Negative. The current price of 839.6 is above the 20-day moving average (MA) of 771.48, above the 50-day MA of 818.48, and above the 200-day MA of 795.80, indicating a bearish trend. The MACD of -19.22 indicates Negative momentum. The RSI at 38.06 is Neutral, neither overbought nor oversold. The STOCH value of 50.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:DRX.
Drax Group plc Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | £2.54B | 28.00 | 3.94% | 2.78% | -11.94% | -84.94% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
59 Neutral | £7.93B | 13.02 | 1.68% | 2.86% | -2.11% | -104.48% | |
58 Neutral | £20.60M | -0.99 | -68.06% | ― | 4.36% | ― | |
56 Neutral | £29.18B | 23.74 | 9.45% | 2.98% | 0.54% | -2.65% | |
48 Neutral | £2.20B | 24.20 | 6.61% | 6.56% | 23.25% | ― | |
45 Neutral | £540.43M | 74.74 | 1.09% | 12.07% | 651.12% | ― |
* Utilities Sector Average
GB:DRX
Drax Group plc
756.00
88.31
13.23%
GB:AMP
SIMEC Atlantis Energy
2.85
0.50
21.28%
GB:CNA
Centrica
175.10
18.05
11.49%
GB:PNN
Pennon Group plc
466.40
-8.88
-1.87%
GB:SSE
SSE
2,421.00
648.38
36.58%
GB:FGEN
Foresight Environmental Infrastructure Limited GBP
86.70
14.52
20.12%
Drax Group plc Corporate Events
Legal ProceedingsRegulatory Filings and Compliance
Drax cleared as UK regulator closes biomass disclosure probe with no action
Positive
Jun 18, 2026
Drax Group plc, a leading UK renewable energy and biomass power operator, focuses on decarbonising electricity generation and providing reliable, flexible power to the grid. The company has increasingly emphasised sustainable biomass sourcing and ...
Executive/Board Changes
Drax Director Mark Clare to Chair Hilton Food Group Board
Positive
Jun 16, 2026
Drax Group plc has announced that non-executive director Mark Clare will become non-executive chair of the board at Hilton Food Group plc from 1 July 2026. The move underscores Clare’s growing influence in U.K. corporate governance while mai...
Business Operations and StrategyPrivate Placements and Financing
Drax Issues 33,501 Shares Under Employee Share Plans
Positive
Jun 1, 2026
Drax Group has issued and allotted 33,501 ordinary shares of 11 16/29 pence each in connection with its employee share plans. The new shares, which were already admitted to trading under existing block admissions on the London Stock Exchange Main ...
Regulatory Filings and Compliance
Drax Updates Market on Total Voting Rights and Share Capital
Neutral
Jun 1, 2026
Drax Group plc reported that as of 31 May 2026 its issued share capital comprised 432,559,697 ordinary shares, of which 96,310,800 are held in treasury and carry no voting rights. This leaves a total of 336,248,897 voting rights, a key reference f...
Business Operations and StrategyM&A Transactions
Drax to buy Bluefield Solar Income Fund in £561m renewables push
Positive
Jun 1, 2026
Drax Group’s subsidiary Drax Smart Generation Holdco has agreed a recommended all-cash deal to acquire Bluefield Solar Income Fund, a UK-listed investor in solar and wind infrastructure, in a transaction valuing BSIF’s equity at about ...
Business Operations and Strategy
Drax Takes Commercial Control of First 299MW OCGT Plant at Hirwaun
Positive
May 29, 2026
Drax has completed commissioning of the Hirwaun Power Station in South Wales, its first 299MW open cycle gas turbine plant, and has taken commercial control from developer Metlen Energy Metals. Hirwaun is the first of three such plants in England...
Executive/Board Changes
Drax CFO Returns to Role After Health-Related Leave
Positive
May 27, 2026
Drax Group has announced that its Chief Financial Officer, Frank Lemmink, has returned to work following a leave of absence taken to recover from a recent health issue. The Board’s formal acknowledgment of his return, alongside thanks to Dep...
Business Operations and StrategyDelistings and Listing Changes
Drax Seeks Block Admission of 210,000 Shares for Employee Plan
Positive
May 26, 2026
Drax Group plc has applied for the block admission of 210,000 ordinary shares to trading on the London Stock Exchange’s Main Market. The new shares will be issued in connection with the company’s Sharesave employee share plan and will ...
Executive/Board Changes
Drax Grants New Long-Term Incentive Share Awards to Senior Executives
Positive
May 8, 2026
Drax Group has granted new conditional share awards to senior executives under its 2020 Long Term Incentive Plan, aligning management rewards with future performance and shareholder interests. Group Chief Executive Will Gardiner, CFO Frank Lemmink...
Business Operations and StrategyRegulatory Filings and Compliance
Drax Updates Voting Rights and Issues New Shares Under Employee Plans
Neutral
May 1, 2026
Drax Group has confirmed that as of 30 April 2026 its issued share capital stands at 432,526,196 ordinary shares, of which 96,310,800 are held in treasury and do not carry voting rights. This leaves 336,215,396 voting shares in circulation, a key ...
Business Operations and StrategyExecutive/Board ChangesStock BuybackDividendsShareholder Meetings
Drax investors back all AGM resolutions, approve dividend and pay policy
Positive
Apr 30, 2026
Drax Group plc reported that shareholders approved all 22 resolutions at its hybrid annual general meeting held in London, including the adoption of its annual report and accounts and a final dividend of 17.4 pence per share. The meeting also conf...
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Drax lifts UK energy security as it expands flexible renewables and returns cash
Positive
Apr 30, 2026
Drax Group reported a solid start to 2026, with operational performance supporting expectations for full-year adjusted EBITDA in line with market consensus and underpinned by strong contracted power sales and index-linked Capacity Market agreement...
Business Operations and StrategyRegulatory Filings and Compliance
Drax Seeks Block Admission of Shares for Employee Plan
Neutral
Apr 15, 2026
Drax Group plc has applied to the London Stock Exchange for a block admission of 210,000 ordinary shares to be admitted to trading on the Main Market. The new shares, expected to be admitted on 16 April 2026, will be used to satisfy awards under t...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Drax Adds to Buyback, Trimming Free-Float and Voting Shares
Positive
Apr 10, 2026
Drax Group plc has continued to execute its previously announced share buyback programme, repurchasing 42,749 ordinary shares on 9 April 2026 on the London Stock Exchange at a volume-weighted average price of about 892.7 pence. This latest tranche...
Stock BuybackRegulatory Filings and Compliance
Drax Adds to Treasury Stock as Share Buyback Programme Advances
Positive
Apr 9, 2026
Drax Group plc continued executing its share buyback programme, repurchasing 71,840 ordinary shares on 8 April 2026 on the London Stock Exchange via J.P. Morgan Securities at a volume-weighted average price of about 896.6 pence. Following this tra...
Business Operations and StrategyStock Buyback
Drax Tightens Free Float With Continued Share Buybacks
Positive
Apr 8, 2026
Drax Group plc has continued executing its previously announced share buyback programme, repurchasing 71,261 ordinary shares on 7 April 2026 through J.P. Morgan Securities at a volume-weighted average price of about 883.39 pence. Following this tr...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Drax Continues Share Buyback, Tightening Free-Float Voting Stock
Positive
Apr 7, 2026
Drax Group plc has continued executing its previously announced share buyback programme, repurchasing 72,200 ordinary shares on the London Stock Exchange on 2 April 2026 through J.P. Morgan Securities at a volume-weighted average price of about 89...
Executive/Board ChangesRegulatory Filings and Compliance
Drax discloses executive share awards and insider dealings after LTIP vesting
Neutral
Apr 2, 2026
Drax Group plc has reported the vesting of deferred share plan and long-term incentive plan awards for several senior executives, triggering a series of transactions in the company’s ordinary shares. Chief executive Will Gardiner received sh...
Business Operations and StrategyStock Buyback
Drax Updates Market on Progress of Ongoing Share Buyback Programme
Positive
Apr 2, 2026
Drax Group plc has continued to execute its previously announced share buyback programme, repurchasing 70,829 ordinary shares on 1 April 2026 through J.P. Morgan Securities at a volume-weighted average price of 892.8157 pence. Following these tran...
Regulatory Filings and Compliance
Drax Confirms Total Voting Rights at 336.4 Million Shares
Neutral
Apr 1, 2026
Drax Group plc reported that as of 31 March 2026 its issued share capital comprised 432,461,089 ordinary shares, each carrying one vote, of which 96,027,685 are held in treasury without voting rights. This leaves a total of 336,433,404 voting righ...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Drax Continues Share Buyback, Lifts Treasury Holdings to Nearly 96 Million Shares
Positive
Apr 1, 2026
Drax Group plc has continued executing its previously announced share buyback programme, repurchasing 73,070 ordinary shares on 31 March 2026 at prices between 876.0p and 886.5p, with a volume-weighted average price of 882.3632p. Following this la...
Business Operations and Strategy
Drax Issues 220,439 Shares Under Employee Incentive Plans
Neutral
Mar 31, 2026
Drax Group has issued and allotted 220,439 ordinary shares in connection with its employee share plans, including the Sharesave Plan, Sharesave Plan 2024 and the Long Term Incentive Plan 2020. The shares, already admitted under existing block admi...
Business Operations and StrategyStock Buyback
Drax Tightens Free Float With Further Share Buyback
Positive
Mar 31, 2026
Drax Group plc bought back 74,500 ordinary shares on 30 March 2026 under its ongoing repurchase programme, paying between 859.5p and 870.5p a share, with a volume-weighted average price of about 866p. The transactions, executed through J.P. Morgan...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Drax Continues Share Buyback, Updates Voting Rights After Latest Repurchase
Positive
Mar 30, 2026
Drax Group plc has continued its ongoing share buyback programme, repurchasing 73,207 ordinary shares on 27 March 2026 through J.P. Morgan Securities at prices ranging from 849.5p to 862.5p, with a volume-weighted average of 856.0201p. Following t...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.