{"id":120286,"date":"2026-08-25T13:04:12","date_gmt":"2026-08-25T13:04:12","guid":{"rendered":"https:\/\/www.europesays.com\/ch\/120286\/"},"modified":"2026-08-25T13:04:12","modified_gmt":"2026-08-25T13:04:12","slug":"ubs-upgrades-drax-but-warns-of-delayed-325m-share-buyback-and-biomass-inflation","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ch\/120286\/","title":{"rendered":"UBS upgrades Drax but warns of delayed \u00a3325m share buyback and biomass inflation"},"content":{"rendered":"

\"UBS<\/a> UBS upgrades Drax but warns of delayed \u00a3325m share buyback and biomass inflation Proactive uses images sourced from Shutterstock <\/p>\n

Drax Group (LSE:DRX)<\/a> secured a cautious upgrade from UBS on Tuesday, as the investment bank lifted the power generator to a ‘neutral’ rating following its Bluefield solar deal. <\/p>\n

The shares ticked up 0.88% to 746p as UBS applied its ‘neutral’ rating, tweaking its financial model to reflect both the \u00a31.08 billion acquisition and emerging cost headwinds. <\/p>\n

At the heart of the update is a 9% increase to the 2026 earnings per share estimate, driven by the early completion of the Bluefield solar transaction. <\/p>\n

That short-term momentum is heavily offset by a 12% downgrade to 2027 earnings per share, reflecting anticipated inflation in biomass fuel costs alongside a decline in legacy generation. <\/p>\n

Those mounting cost pressures mean the outstanding \u00a3325 million share buyback programme is now highly unlikely to commence before the start of 2027. <\/p>\n

The utility must also fully refinance its acquisition bridge loan before any excess cash is funnelled back into further shareholder returns. <\/p>\n

In the same note, UBS flagged that the business can still sustain<\/a> underlying earnings of roughly \u00a3700 million through the remainder of the decade. <\/p>\n

That financial stability relies heavily on battery storage and solar investments successfully replacing the lost output from the dwindling Yorkshire biomass operations. <\/p>\n

The bank also noted that monetising a 100-megawatt grid connection for potential data centre developments could unlock a 29 pence-per-share upside, currently ignored by the market. <\/p>\n

The next major catalyst arrives with November’s capital markets day, a critical forum where management must definitively map out its organic development pipeline and long-term capital strategy. <\/p>\n","protected":false},"excerpt":{"rendered":"UBS upgrades Drax but warns of delayed \u00a3325m share buyback and biomass inflation Proactive uses images sourced from…\n","protected":false},"author":2,"featured_media":120287,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[129],"tags":[58636,58635,8194,8193,1079,1929,223],"class_list":["post-120286","post","type-post","status-publish","format-standard","has-post-thumbnail","category-ubs","tag-anticipated-inflation","tag-biomass-fuel","tag-drax","tag-drax-group","tag-earnings-per-share","tag-share-buyback","tag-ubs"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ch\/117156293366212455","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/120286","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=120286"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/posts\/120286\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media\/120287"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/media?parent=120286"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/categories?post=120286"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ch\/wp-json\/wp\/v2\/tags?post=120286"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}