Drax Group (LON:DRX) Posts Earnings Results

Drax Group (LON:DRX) issued its quarterly earnings data on Thursday. The company reported GBX 137.70 EPS for the quarter, Digital Look Earnings reports. Drax Group had a return on equity of 31.63% and a net margin of 9.42%.

Here are the key takeaways from Drax Group’s conference call:

• Signed a low‑carbon dispatchable CfD for Drax Power Station that will sell ~6 TWh/year with flexible reprofiling, underpinning the company’s plan to generate about GBP 3 billion of free cash flow between 2025–2031 and support earnings under the new operating regime.
• Accelerating growth strategy — planning up to 1 GW+ of data center capacity at the Drax site (phased 100 MW front‑of‑meter then ~500 MW behind‑the‑meter pre‑2031) and building a gigawatt‑scale BESS pipeline with operational control/agreements for over 700 MW and acquisition of Flexitricity to optimize assets.
• Strong 2025 financials and balance sheet strength — GBP 947 million Adjusted EBITDA, record 15 TWh biomass generation, net debt of GBP 784 million (0.8x EBITDA), an expected 11.5% dividend increase and ongoing buybacks, providing headroom to fund growth and returns.
• Material write‑downs and project pauses in pellets/BECCS — a GBP 198 million charge on the Canadian pellet business, a GBP 139 million impairment on Longview, and a GBP 48 million BECCS impairment, with no near‑term capital commitment to Canadian expansion.
• Implementing a “Future Focused” cost and restructuring programme (consultation to reduce 350+ roles) targeting >GBP 150 million of structural savings by 2027, which management says is already reflected in the post‑2027 EBITDA guidance but may involve one‑off charges.

Drax Group Stock Down 0.9%

LON:DRX opened at GBX 891 on Friday. The company has a debt-to-equity ratio of 64.11, a quick ratio of 0.32 and a current ratio of 1.26. The company has a market cap of £3.02 billion, a PE ratio of 8.27, a PEG ratio of 0.10 and a beta of 1.22. Drax Group has a 52-week low of GBX 534.50 and a 52-week high of GBX 937.50. The stock has a 50-day simple moving average of GBX 875.53 and a 200 day simple moving average of GBX 769.12.

Analyst Ratings Changes

Several equities research analysts have issued reports on the company. Jefferies Financial Group increased their price target on Drax Group from GBX 750 to GBX 1,120 and gave the stock a “buy” rating in a report on Wednesday, January 7th. Royal Bank Of Canada reissued an “outperform” rating and set a GBX 950 target price on shares of Drax Group in a research note on Wednesday, November 5th. Finally, Citigroup lifted their price target on shares of Drax Group from GBX 850 to GBX 923 and gave the company a “buy” rating in a research note on Thursday, February 12th. Four investment analysts have rated the stock with a Buy rating, According to data from MarketBeat.com, the company currently has a consensus rating of “Buy” and an average price target of GBX 998.25.

Drax Group News Summary

Here are the key news stories impacting Drax Group this week:

• Positive Sentiment: Drax beat profit expectations for the full year and reaffirmed its medium‑term targets — the results cited strong pellet production and operational strength that underpin cash flow and earnings visibility. Article Title
• Positive Sentiment: Drax reported record renewable generation in 2025 and said a new CfD (Contract for Difference) underpins its growth push — this supports longer‑term cash flows from low‑carbon power and strengthens the renewables growth thesis. Article Title
• Positive Sentiment: Drax declared a final dividend of 17.4p for 2025, reflecting strong cash generation and returning more cash to shareholders — dividend increases often support investor demand for the stock. Article Title
• Positive Sentiment: Drax has continued executing its previously announced share buyback programme, reducing free float and supporting the share price by lowering available supply. Article Title
• Neutral Sentiment: The share price reaction has pushed Drax to levels not seen in nearly 20 years — a market response to the results and corporate actions, but one that increases valuation scrutiny from investors. Article Title
• Neutral Sentiment: Drax is advancing a data‑centre plan that would leverage its low‑carbon power — this could be a strategic growth avenue but carries execution and capital allocation uncertainty. Article Title

Drax Group Company Profile

Drax Group plc, together with its subsidiaries, engages in renewable power generation in the United Kingdom. It operates through three segments: Pellet Production, Generation, and Customers. The Pellet Production segment produces and sells biomass pellets. The Generation segment provides renewable, dispatchable power, and system support services to the electricity grid. The Customers segment supplies electricity and gas to non-domestic customers. The company owns and operates Drax Power Station located in Selby, North Yorkshire; Cruachan Power Station, a pumped storage hydro station, with an installed capacity of 440 megawatts (MW) located in Argyll and Bute; and Lanark and Galloway hydro-electric power stations with an installed capacity of 126 MW located in southwest Scotland.