One thing we could say about the analysts on Drax Group plc (LON:DRX) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the six analysts covering Drax Group provided consensus estimates of UK£5.2b revenue in 2025, which would reflect an uneasy 16% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to crater 30% to UK£1.01 in the same period. Prior to this update, the analysts had been forecasting revenues of UK£7.5b and earnings per share (EPS) of UK£1.03 in 2025. So there's been a clear change in analyst sentiment in the recent update, with the analysts making a pretty serious reduction to revenues and reconfirming their earnings per share estimates.

See our latest analysis for Drax Group LSE:DRX Earnings and Revenue Growth March 1st 2025

The consensus has reconfirmed its price target of UK£8.51, showing that the analysts don't expect weaker sales expectationsthis year to have a material impact on Drax Group's market value.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 16% by the end of 2025. This indicates a significant reduction from annual growth of 13% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 0.5% per year. It's pretty clear that Drax Group's revenues are expected to perform substantially worse than the wider industry.

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, and industry data suggests that Drax Group's revenues are expected to grow slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Drax Group after today.

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.

Story Continues

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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.

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