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Drax Group's updated analyst models now point to a slightly higher Fair Value estimate, moving from £9.61 to £9.68 per share. That shift lines up with recent research that clusters price targets near £9.50 and leans toward more neutral ratings, suggesting analysts see the current share price as closer to their central valuation range. As you read on, you will see how these revised targets and changing views shape the story investors are watching.
What Wall Street Has Been Saying
🐂 Bullish Takeaways
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Morgan Stanley lifted its price target from 900 GBp to 950 GBp, indicating that, in its view, there are long term opportunities for Drax Group to create value even as the rating moves to Equal Weight.
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The updated target from Morgan Stanley supports the idea that recent revisions are edging higher, which lines up with fair value estimates that now sit close to the mid £9 range.
🐻 Bearish Takeaways
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Morgan Stanley's downgrade from Overweight to Equal Weight signals a more cautious stance, with the firm describing the shares as fairly priced after a 25% share price gain since November.
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Citi has taken a more bearish view, with its analyst commentary pointing to growing concerns that temper enthusiasm and contribute to the recent tilt toward neutral ratings on the stock.
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Goldman Sachs initiated coverage with a neutral view, reinforcing the message that while there may be long term options on the table, current visibility keeps expectations in check rather than clearly skewed to the upside.
Do your thoughts align with the Bull or Bear Analysts? Perhaps you think there's more to the story. Head to the Simply Wall St Community to discover more perspectives!
We've flagged 3 risks for Drax Group. See which could impact your investment.
What's in the News
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Drax Group's Chief Financial Officer, Frank Lemmink, has taken a six month leave of absence for health reasons from 5 March 2026, with Deputy CFO Daniel Peacock stepping in as interim CFO and reporting to CEO Will Gardiner.
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The board has proposed a final dividend of 17.4p per share for the year ended 31 December 2025, subject to approval at the 2026 AGM, with payment scheduled for 15 May 2026, an ex dividend date of 23 April 2026, and a record date of 24 April 2026.
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Between 1 July 2025 and 31 December 2025, Drax completed a tranche of its share buyback, repurchasing 13,866,693 shares, or 3.84% of the company, for £102.5m, bringing total buybacks under the current programme to 54,357,775 shares, or 14.59%, for £358.4m.
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Drax signed a 15 year tolling agreement with Zenobe Coalburn Limited for 200MW, or 800MWh, of new battery energy storage capacity in Scotland, contributing to a total of 710MW, around 1.8GWh, of tolling contracts and physical battery storage assets across its FlexGen business.
How This Changes the Fair Value For Drax Group
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Fair value was revised from £9.61 to £9.68 per share, indicating a modest uplift in the central valuation estimate.
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The revenue growth assumption moved from a 6.35% decline to a 4.70% decline, pointing to a less severe expected drop in future £ revenue.
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The net profit margin was adjusted from 4.79% to 4.41%, signalling slightly lower expected profitability on future £ earnings.
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The future P/E moved from 17.32x to 16.58x, suggesting a modestly lower valuation multiple applied to forecast earnings.
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The discount rate edged down from 8.28% to 8.24%, reflecting a small change in how future cash flows are being discounted.
Never Miss an Update: Follow The Narrative
Narratives connect Drax Group's business story to analyst forecasts and fair value, so you can see how new information feeds into the bigger picture. They update over time as expectations for earnings, risks, and cash flows change.
Head over to the Simply Wall St Community and follow the Narrative on Drax Group to stay up to date on:
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How government backed low carbon contracts and flexible generation support long term revenue visibility for Drax Power Station through 2031.
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What expanding battery storage, grid support services, BECCS, and carbon removals could mean for Drax's future earnings mix.
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Key risks around pellet market oversupply, changing biomass regulations, and execution challenges in new high margin projects.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include DRX.L .
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