Last checked at 
(Sharecast News) - Citi downgraded its stance on Drax on Thursday to 'neutral' from 'buy' as it said the risk/reward was less attractive following a 50% share price rise over the last six months.
"In our view, the risk/reward balance has become less attractive following the re-rating of the stock, with the shares now pricing in the current high commodity prices into perpetuity and circa 70% probability of £3bn value-creative investment as outlined in the capital markets day," Citi said.
The bank said the key risk to the shares is a normalisation to UK power prices after this winter and a less lucrative remuneration structure for both BECCs (bioenergy carbon capture and storage) and pump storage extension, neither of which can be excluded as a potential risk.
"While sentiment could continue to support what's perceived as a green growth stock, especially with upward moving consensus forecasts for the near term, we do not fundamentally see biomass as a sustainable source of energy, nor see current high commodity prices to be a sustainable one," it said.
Citi has a 651p price target on the shares.
At 0930 GMT, the shares were down 3.5% at 580.10p.
19 Jul 2022 15:52
UK earnings, trading statements calendar - next 7 days
| Wednesday 20 July | |
| Abcam PLC | Trading Statement |
| Alliance Pharma PLC | Trading Statement |
| Antofagasta PLC | Q2 Production Results |
| Centamin PLC | Q2 Production Results |
| Centaur Media PLC | Half Year Results |
| Costain Group PLC | Trading Statement |
| Hochschild Mining PLC | Trading Statement |
| PayPoint PLC | Q1 Results |
| Petropavlovsk PLC | Trading Statement |
| Pharos Energy PLC | Trading Statement |
| Premier Foods PLC | Q1 Results |
| Royal Mail PLC | Q1 Results |
| Thursday 21 July | |
| AJ Bell PLC | Q3 Results |
| Anglo American PLC | Q2 Production Results |
| Brewin Dolphin Holdings PLC | Trading Statement |
| Britvic PLC | Q3 Results |
| Close Brothers Group PLC | Trading Statement |
| Diploma PLC | Q3 Results |
| Dunelm Group PLC | Trading Statement |
| DWF Group PLC | Full Year Results |
| Euromoney Institutional Investor PLC | Q3 Results |
| Frasers Group PLC | Trading Statement |
| Fulham Shore PLC | Full Year Results |
| Howden Joinery Group PLC | Half Year Results |
| IG Group Holdings PLC | Full Year Results |
| Intermediate Capital Group PLC | Q1 Results |
| Ocado Group PLC | Half Year Results |
| PensionBee Group PLC | Trading Statement |
| Polymetal International PLC | Q2 Production Results |
| Qinetiq Group PLC | Trading Statement |
| Redcentric PLC | Full Year Results |
| Seraphine Group PLC | Full Year Results |
| SSE PLC | Q1 Results |
| Workspace Group PLC | Q1 Results |
| Friday 22 July | |
| Beazley PLC | Half Year Results |
| FRP Advisory Group PLC | Full Year Results |
| Record PLC | Q1 Results |
| Monday 25 July | |
| ECO Animal Health Group PLC | Full Year Results |
| F&C Investment Trust PLC | Half Year Results |
| GlobalData PLC | Half Year Results |
| JTC PLC | Trading Statement |
| Plant Health Care PLC | Trading Statement |
| SThree PLC | Half Year Results |
| Vodafone Group PLC | Trading Statement |
| XLMedia PLC | Trading Statement |
| Tuesday 26 July | |
| Aberforth Smaller Companies Trust PLC | Half Year Results |
| Ascential PLC | Half Year Results |
| Bytes Technology Group PLC | Trading Statement |
| Capital & Counties Properties PLC | Half Year Results |
| Cohort PLC | Full Year Results |
| Compass Group PLC | Trading Statement |
| Drax Group PLC | Half Year Results |
| easyJet PLC | Trading Statement |
| Ergomed PLC | Trading Statement |
| Franchise Brands PLC | Half Year Results |
| Games Workshop Group PLC | Full Year Results |
| Gore Street Energy Storage Fund PLC | Full Year Results |
| Greencore Group PLC | Q3 Results |
| John Menzies PLC | Trading Statement |
| Medica Group PLC | Trading Statement |
| Mitie Group PLC | Trading Statement |
| NewRiver REIT PLC | Trading Statement |
| Playtech PLC | Trading Statement |
| Reach PLC | Half Year Results |
| Ricardo PLC | Trading Statement |
| Sabre Insurance Group PLC | Half Year Results |
| SME Credit Realisation Fund Ltd | Full Year Results |
| Trifast PLC | Full Year Results |
| Tyman PLC | Half Year Results |
| Unilever PLC | Half Year Results |
| Vivo Energy PLC | Half Year Results |
| Wickes Group PLC | Trading Statement |
| Copyright 2022 Alliance News Limited. All Rights Reserved. | |
