ITM Power’s Rally Unravels as Three June Catalysts Test Hydrogen Optimism

On paper, ITM Power has seldom looked stronger. The Sheffield-based electrolyser specialist posted record half-year revenues of £18 million, raised its full-year guidance to £40–43 million — roughly 35% growth on the prior year — and secured a £40 million investment from Great British Energy, which now holds a 10.4% stake and ranks as the second-largest shareholder. Yet the share price has been brutally punished. After surging 110% year to date to a peak of 2.58 euros on 29 May, the stock has collapsed 42% from that high, trading at around 1.53 euros following a 27% slide in the past five trading sessions alone.

Behind the sell-off lies a market demanding proof of execution. Three binary decisions are pending in June, and investors are pricing in the risk that not all will land as hoped. The Competition and Markets Authority is expected to rule this month on a £46.5 million grant for the Chronos production line — a facility designed to deliver 2 MW units, triple the output of current systems, with 40% lower costs and half the footprint. Jefferies has warned that a negative outcome carries a 52% downside risk for the stock. Meanwhile, the UK’s HAR2 hydrogen auction, which allocates up to 875 MW of capacity, has ITM as a preferred supplier for two projects. Contracts are not due until end-2026, but first signals could emerge in June. And Uniper’s Humber H2ub project at Killingholme, which envisions six 20 MW POSEIDON modules for a potential eventual scale of over 200 MW, is expected to reach a final investment decision for its first phase within weeks.

The drop accelerated after ITM was added to the MSCI UK Small Cap Index, triggering a classic sell-the-fact reaction as hedge funds that had positioned ahead of the rebalancing flooded the market with stock. Goldman Sachs reinforced the bearish tone by maintaining its sell recommendation with a target of just 63 pence. Sector contagion added further pressure: Ballard Power Systems tumbled 19%, Plug Power lost 12%, and Clean Power Hydrogen suspended trading after a pilot electrolyser was irreparably damaged, casting doubt on the technological readiness of the hydrogen industry as a whole.

Should investors sell immediately? Or is it worth buying ITM Power?

Yet the underlying business continues to improve. The order book stands at £152 million, with 71% of contracts considered profitable. The adjusted EBITDA loss narrowed to £11.9 million from £16.8 million a year earlier. Net liquidity guidance was raised to £210–215 million, up from a previous forecast of £170–175 million, and the government’s stake through Great British Energy removes the near-term risk of a dilutive capital raise. The company has also shifted its revenue recognition to a contract-life basis, which Gordon D’Arby? Actually, a buchhalterischer Wechsel (accounting change) means reported revenue now moves faster than actual cash flows — a nuance that complicates external analysis but reflects genuine progress in contract execution.

Beyond the immediate catalysts, ITM is building longer-term optionality. Its partnership with Protium Green Solutions targets industrial green hydrogen plants in the UK, starting with the 15 MW Cromarty Hydrogen Project in the Scottish Highlands. That site will produce roughly seven tonnes of green hydrogen daily and create about 30 jobs in its first phase, but the final investment decision is not due until December 2026, meaning no near-term revenue. Separately, a joint venture with Rheinmetall under the Giga-PtX project opens a synthetic fuel market; each planned plant could produce up to 7,000 tonnes of e-fuels annually, offering access to an entirely new customer base.

Analyst opinions remain sharply divided. Jefferies raised its target to 200 pence and is bullish, while Morgan Stanley now expects EBITDA breakeven in fiscal 2028, a year earlier than previously forecast. Berenberg maintains a buy with a 110 pence target, UBS stays neutral at 60 pence, and Goldman Sachs remains the lone bear at 63 pence. Retail investors have been stepping in: at one major UK broker, buy orders accounted for 63% of early morning trades during the rout. The stock, despite the recent plunge, still trades roughly 50% above its 200-day moving average.

The coming weeks will determine whether the year-to-date rally was built on solid foundations or on premature optimism. ITM Power is due to report annual results on 15 September 2026. By then, the outcomes of the Chronos grant, the HAR2 auction signals, and Uniper’s final investment decision should have answered whether the market’s current risk premium is a temporary overreaction or a sober reassessment of the gap between hydrogen’s promises and its delivery.

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ITM Power Stock: New Analysis - 10 June

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