Power station group Drax's full-year results may have come in slightly ahead of expectations but Cantor Fitzgerald retained its 'sell' rating for the stock on Tuesday morning.

The company's results for 2012 were slightly ahead of its own guidance, "as has often tended to be the case", says analyst Angelos Anastasiou.

Earnings before interest, tax, depreciation and amortisation came in at £298.4m, down 10.6% year-on-year but ahead of the guidance range of £285-290m and the £292.5m consensus estimate (Cantor had estimated £295.3m).

Anastasiou highlights that output was strong last year at 27.1TWh and the group is now progressing with its biomass plans. The first unit conversion is on track to be completed in April 2013, the next is due in the second half of 2014 and the third is scheduled for 2016.

"However, we believe that the plans are not risk free, and the group remains exposed to carbon costs even after the planned unit conversions. Hence, we reiterate our 'sell' recommendation and our 523p target price," Anastasiou said.

Nevertheless, the market was impressed by the full-year beat, with shares up 4.55% at 632p by 11:15.

BC

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