Drax powers ahead after Citi upgrade to 'buy'
By Michele Maatouk
Date: Wednesday 03 Dec 2025
(Sharecast News) - Citi upgraded Drax on Wednesday to 'buy' from 'neutral' and lifted the price target to 850p from 689p as it pointed to limited downside risk.
"Whilst we remain inherently sceptical of biomass as an economically viable, clean and sustainable technology, the signed government CFD extension to 2031 has prolonged Drax's asset life, dampened its cashflow cliff and bought company time to explore other strategic opportunities," the bank said.
"With old generation sites redeveloped for AI/data centre usage sold and option for inertia contracts, it's hard to ignore potential value of 'old-world' assets at Drax, which historically been valued at zero."
Citi said it now conservatively includes some of these assets in its valuation.
The bank said that under a blue sky scenario, it sees a further circa 270p a share of potential value creation.
At 1220 GMT, the shares were up 4.7% at 762.50p.
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