Broker Revenue Forecasts For Drax Group plc (LON:DRX) Are Surging Higher

Drax Group plc (LON:DRX) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.

Following the upgrade, the current consensus from Drax Group's six analysts is for revenues of UK£6.6b in 2025 which - if met - would reflect a satisfactory 6.7% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to nosedive 30% to UK£1.02 in the same period. Previously, the analysts had been modelling revenues of UK£6.8b and earnings per share (EPS) of UK£1.01 in 2025. So it looks like the analysts have become a bit less optimistic after the latest consensus updates announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

See our latest analysis for Drax Group

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Drax Group's past performance and to peers in the same industry. We would highlight that Drax Group's revenue growth is expected to slow, with the forecast 6.7% annualised growth rate until the end of 2025 being well below the historical 13% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 1.6% annually. So it's pretty clear that, while Drax Group's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Drax Group.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Drax Group going out to 2027, and you can see them free on our platform here..

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.