Drax Group<\/a>\u00a0results could be a key test for the shares this month as investors weigh excitement over data centre developments against tougher questions on biomass costs and cash deployment.<\/p>\nThe biomass burner reports full-year results on 26 February. Shares have risen 24% over the past three months, outperforming the wider sector, on optimism that it can unlock value from plans to supply electricity to data centres.<\/p>\n
UBS is more cautious, with analysts retaining a ‘sell’ rating and 680p price target, arguing that long-term viability hinges more on wood pellet costs and what it plans to do with \u00a32 billion of cash flow by 2031.<\/p>\n
For 2025, Drax said in December that full-year adjusted EBITDA should come in around the top end of consensus estimates, which range from \u00a3892 million to \u00a3909 million.<\/p>\n
The City consensus is for EBITDA of \u00a3912\u00a0million and\u00a0adjusted earnings per share of 121p, per Visible Alpha, with UBS expecting net debt of \u00a3920 million.<\/p>\n
For 2026, analysts in the Square Mile forecast EBITDA to fall to \u00a3664\u00a0million (UBS sees \u00a3629 million), reflecting lower output and more conservative assumptions on power optimisation.<\/p>\n
Drax has recently been trumpeting its ambitions to develop up to a gigawatt of data centre capacity in Yorkshire over a decade, with planning for the first 100MW facility in Yorkshire underway.<\/p>\n
UBS estimates this would equate to 18-47% of projected UK data centre power demand growth to 2035, but analysts said they think it is likely to be “difficult to achieve” the circa-\u00a3170\/MWh (2028 prices) power price on biomass required to breakeven.<\/p>\n
Investors are also likely also focus on pellet production costs, progress on open-cycle gas turbines and the group\u2019s cost-cutting programme as output drops from 2027.<\/p>\n","protected":false},"excerpt":{"rendered":"Drax capital allocation to be in focus at results, says UBS Proactive uses images sourced from Shutterstock Drax…\n","protected":false},"author":2,"featured_media":10649,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[129],"tags":[2355,1258,8194,8193,223,1966],"class_list":{"0":"post-10648","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-ubs","8":"tag-capital-allocation","9":"tag-data-centre","10":"tag-drax","11":"tag-drax-group","12":"tag-ubs","13":"tag-ubs-proactive"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/10648","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/comments?post=10648"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/10648\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media\/10649"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media?parent=10648"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/categories?post=10648"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/tags?post=10648"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"Drax](\"https:\/\/www.europesays.com\/ch\/wp-content\/uploads\/2026\/02\/17b8dfeef5ff619f50a182180d91421d.jpeg\")
Drax capital allocation to be in focus at results, says UBS Proactive uses images sourced from Shutterstock <\/p>\n