Drax has received yet another bullish broker recommendation, this time from US broker Jefferies which says it likes the power generator even stripping out any benefit from its carbon capture/storage project (BECCS).
BECCS was one of the casualties (supposedly) of the government’s 'green day', though it might yet get a reprieve but even without the US bank sees 16% upside in Drax shares.
Best case, it says, is a delay of two years in the BECCS project, which would mean around £600mln lower capex spending than otherwise.
Jefferies has cut its share price target, to 700p, but adds that lower capital spending and strong underlying cash flow give more scope for capital returns so 'buy' is the bank’s investment view.
Shares today rose by 2.6% to 621p.