Drax Enterprise Value1 Oct 2021 14:09
I am invested in Drax for a long time and have studied the company to some extent in my own way. I just came across an article regarding MGT Teesside Biomass power plant. It is 300MW plant that I understand operates under CfD and it cost £650m to build. I am not sure how efficient Drax plants are to this one however, taking into account - Drax has a production capacity of c.2.6GW i.e. almost 9 times - Drax biomass plants should be worth around £5.8bn. This does not include any other part of the business. Drax EV is currently c. £3bn. On this basis - it seems overly undervalued to me. Am I being too simplistic here or missing something? Any views will be appreciated.