RBC Capital Markets sees a 47% total return from Drax Group (LSE:DRX), with the Canadian Bank's London-based analysts arguing that the market undervalues its expanded renewables portfolio and data centre potential.
“We see significant upside in Drax at these levels,” the bank said, in a note, whilst raising its price target to 1,050p from 1,000p, versus a prevailing price of 737.5p, and repeated an Outperform rating.
Analyst forecasts now include the Bluefield Solar Income Fund acquisition, which adds around 795MW of solar, 58MW of wind and a 2.9GW development pipeline. RBC expects group EBITDA of approximately £847 million in 2029 after overheads.
RBC sees further upside from a proposed data centre at Drax Power Station. An initial 100MW planning application is targeted for the second half of 2026, while a full development could add around 225p per share to valuation. Meanwhile, debt is expected to rise following roughly £1.5 billion of investment since October 2025, but RBC forecasts leverage falling below two times EBITDA in 2027.
