Drax Group (LON:DRX) Releases Earnings Results

Drax Group (LON:DRX) posted its quarterly earnings data on Thursday. The company reported GBX 137.70 earnings per share (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 1.4%

Shares of DRX traded down GBX 12.50 during mid-day trading on Friday, reaching GBX 887. The company’s stock had a trading volume of 828,731 shares, compared to its average volume of 6,571,413. The company has a debt-to-equity ratio of 64.11, a current ratio of 1.26 and a quick ratio of 0.32. Drax Group has a 12-month low of GBX 534.50 and a 12-month high of GBX 937.50. The stock has a market cap of £3.01 billion, a PE ratio of 8.24, a price-to-earnings-growth ratio of 0.10 and a beta of 1.22. The company’s 50 day moving average is GBX 876.67 and its 200 day moving average is GBX 770.56.

Wall Street Analysts Forecast Growth

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

Trending Headlines about Drax Group

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

• Positive Sentiment: Earnings beat and near‑term market reaction — Drax reported full‑year profits above expectations (EPS GBX 137.70 for the quarter) and the results helped push the stock to its highest levels in almost 20 years. Institutional commentary highlights stronger pellet production and operational performance. Drax Rises to 20-Year High After Earnings Beat Expectations
• Positive Sentiment: Reaffirmed guidance — Management beat on earnings and reaffirmed medium‑term targets, providing continuity on the growth outlook that supports valuation. Drax beats full-year earnings, reaffirms medium-term targets
• Positive Sentiment: Renewables growth and CfD support — Drax reported record renewable generation in 2025 (supplying ~6% of UK power) and said a new Contract for Difference (CfD) underpins its growth push, which strengthens future cash‑flow visibility. Management also signalled higher shareholder returns. Drax boosts renewables output, dividend and buybacks as new CfD underpins growth push
• Positive Sentiment: Ongoing buybacks tighten free float — Drax continued executing its announced share buyback programme, reducing share count and supporting per‑share metrics. That typically provides support for the share price over time. Drax Tightens Free Float with Further Share Buybacks
• Positive Sentiment: Final dividend declared — Drax announced a final dividend of 17.4p for 2025, reinforcing cash return to shareholders. Income investors will view this favourably. Drax Declares Final 17.4p Dividend for 2025
• Neutral Sentiment: Strategic pivot to data centres — Coverage notes a new data‑centre plan that would leverage Drax’s energy assets; the move is strategic but execution and returns are yet to be proven. Drax flicks switch on data centre plan
• Neutral Sentiment: Investor materials available — Management hosted a conference call and published slides (useful for deeper diligence on guidance, CfD impact and buyback cadence). View Slide Deck

About Drax Group

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.