Citi seems to believe the government’s Green Day on Thursday asked more questions than it answered – at least so far as generator Drax Group (LSE:DRX) PLC is concerned.
“We continue to see biomass as a transitional fuel, with yesterday's announcements failing to provide resolution one way or the other on the future for BECCS [bioenergy with carbon capture and storage], with the can kicked down the road again, at least until June, the new date for the UK Government biomass strategy paper publication,” the US investment bank said in a note to clients.
“What is potentially a positive for the business, however, is that the government is open to the possibility of Drax receiving bridge support until BECCs (if confirmed) become operational.”
Citi repeated its ‘neutral’ recommendation and 628p a share price target. In afternoon trade, the stock was changing hands for 610p, up 4p on the day.