Drax Group DRX.L
United KingdomUtilities · Utilities - RenewableLondon Stock Exchange · GBP
9.23 GBP (+19.0%)
9 analysts
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Drax Group is a renewable energy generation company based in the United Kingdom, operating Europe's largest biomass plant and trading electricity and flexibility services for the British power system.
Listed on London Stock Exchange · Symbol DRX.L · LON: DRX · Currency GBP
Key points
from its scores- ✓Very solid balance sheet7.8
- ✓Favourable backdrop7.7
- ✕Weak growth2.1
- ✕Little or no dividend4.1
- ✕Little competitive advantage4.8
AI analysis
bottom line, main risk, context and newsCash generation and the balance sheet are reasonable, but negative growth and low profitability limit the upside potential.
Drax shows solid financial health (7.83) with moderate leverage (ND/EBITDA of 1.35), but its growth is negative (revenue -6.3%, earnings -19.5%) and its return on equity is very poor (ROE 0.82), which weighs on its quality and long-term attractiveness.
Dependence on UK government subsidies and renewable certificates for its biomass business, a regulatory change of which could materially affect its cash flow.
Context and risks
Drax operates biomass plants that depend on subsidies and renewable origin certificates from the UK government. An adverse regulatory change in the biomass support framework could materially affect its cash generation, given its business model based on these incentives.
Is Drax Group stock cheap or expensive?
at the analysis dateOn P/E and EV / EBITDA, it trades 146% above the Utilities median on average.
| Multiple | Company | Sector | Difference |
|---|---|---|---|
| P/E | 86.2 | 19.1 | +352% |
| EV / EBITDA | 4.8 | 12.2 | −61% |
| Price / book | 1.5 | 1.9 | −22% |
| Price / sales | 0.5 | 2.6 | −81% |
Sector: median of the 92 Utilities companies analysed. In bold, the multiples used for the comparison.
Valuation score: 6.2 out of 10 (median for Utilities: 4.8).
Average analyst target: 9.23 GBP, +19.0% versus the price.
A premium can be justified if the company is of higher quality or grows faster than its sector: Quality / Moat 4.8 (sector 3.8), Growth 2.1 (sector 5.8).
Classic formulas with standard assumptions (10.0% growth, 8-9% discount rate). Indicative only: they change a lot with the assumptions and are not a recommendation.
Work out its fair value yourself →How much would you have made investing every month? →
Comparing it with its sector does not say whether it is a good buy: this is not investment advice.
Score by category
0 to 10 · hover overtap each one to see what it measuresKey metrics
at the analysis date · compared with the Utilities medianValuation
- P/E
- 86.2
- Forward P/E
- 13.9
- EV / EBITDA
- 4.8
- Price / book
- 1.5
- Price / sales
- 0.5
- Market cap
- 2.6B GBP
- Enterprise value
- 3.6B GBP
Profitability
- ROE
- 0.8%
- ROA
- 7.0%
- ROIC (approx.)
- 19.2%
- Gross margin
- 24.3%
- Operating margin
- 10.8%
- Net margin
- 0.4%
- Free cash flow
- 273.6M GBP
- FCF yield
- 10.5%
- Cash conversion
- 36%
Solvency
- Total debt
- 1.2B GBP
- Net debt
- 1.0B GBP
- Cash
- 179.6M GBP
- EBITDA
- 755.0M GBP
- Net debt / EBITDA
- 1.35
- Debt / equity
- 68.77
- Current ratio
- 1.07
- Quick ratio
- 0.33
Growth
- Revenue growth
- −6.3%
- Earnings growth
- −19.5%
- EPS (TTM)
- 0.09 GBP
- EPS (forward)
- 0.56 GBP
Dividend
- Dividend yield
- 3.9%
- Payout
- 341.2%
Risk and market
- Beta
- 0.66
- Analyst consensus
- Buy (9)
- Target price
- 9.23 GBP
Recent news
All DRX.L news →Compare it with its sector
All 92 in Utilities →Frequently asked questions about Drax Group
Is Drax Group stock cheap or expensive?
On P/E and EV / EBITDA, it trades 146% above the Utilities median on average. Valuation score: 6.2 out of 10 (median for Utilities: 4.8). Average analyst target: 9.23 GBP, +19.0% versus the price. This is not investment advice.
What score does Drax Group get on MeridIAn Screener?
It scores 6.1 out of 10, rank 888 of 2,130 (better than 55% of the companies analysed). Its strongest category is Financial health (7.8) and its weakest, Growth (2.1). Analysis of 08/10/2026.
What is Drax Group's P/E ratio?
Its P/E is 86.2: the share price equals 86.2 times earnings per share over the last 12 months. The Utilities median is 19.1. Based on the earnings analysts expect, the forward P/E is 13.9.
How much is Drax Group worth on the stock market?
Its market capitalisation is 2.6B GBP and its enterprise value, debt included, is 3.6B GBP.
How much debt does Drax Group have?
Its net debt (debt minus cash) is 1.0B GBP. That is 1.35 times its EBITDA; the Utilities median is 5.33.
Does Drax Group pay a dividend?
Yes: its dividend yield is 3.87% and it pays out 341% of its earnings.
How has Drax Group stock performed over the last year?
It has risen 9.1% over the last year, excluding dividends. Over the last 52 weeks it has traded between 0.00 and 9.38 GBP. Past performance does not guarantee future results.
What do analysts think of Drax Group?
9 analysts cover it; their average recommendation is “Buy” and their average target is 9.23 GBP (+19.0% versus the price). It is an estimate, not market data.