Drax Group (LSE:DRX) is seen as a beneficiary of Britain’s need for more power, with analysts at JP Morgan giving the electricity generator an ‘Overweight’ rating.
Resuming its coverage at 'overweight', with a target price of 1,000p, implying 46% upside potential, JP Morgan also previewed upcoming interim results (due 31 July) and tipped Drax to extend rewards for shareholders.
JPM analysts, in a note, pointed to increased intermittency in the UK’s electricity grid as a driver of future value, with Drax positioned to benefit from demand for stable and flexible power sources.
The research also flagged confidence in the group’s financial discipline and strategic approach to capital deployment.
“We expect a £200m extension of the share buyback to be announced at interim results on July 31st, and we place Drax on positive catalyst watch,” the American bank said.