ITM Power: A Government Grant, a Hydrogen Auction, and Uniper's Decision — June's High-Stakes Triple Play

The hydrogen sector is notorious for whipsaw moves, but ITM Power’s recent swing from a record high to a double-digit weekly rout has tested even hardened shareholders. The stock, which touched an all?time peak of €2.58 on 29 May, spent Monday attempting to regain its footing, trading at €1.74 after a 3.8% bounce. Even that recovery left the shares roughly 34% below the May high — a stark reminder of how quickly sentiment can shift when institutional sellers collide with retail conviction.

A Perfect Storm of Catalyst and Contagion

The sell?off that began last week had three distinct triggers. First, ITM Power’s inclusion in the MSCI UK Small Cap Index at the end of May triggered a textbook “sell?the?fact” wave, as hedge funds and arbitrageurs who had accumulated positions ahead of the rebalancing aggressively exited. Second, Goldman Sachs reaffirmed its sell rating, lifting its price target only marginally from 55 to 63 pence — a level that remains well below the current share price and signals the bank’s conviction that the stock is overvalued relative to its path to profitability. Third, a sector?wide shock reverberated: Ballard Power Systems lost 19% in a single session, Plug Power dropped roughly 12%, and Clean Power Hydrogen suspended trading after reporting irreparable damage to a pilot electrolyser. ITM Power was dragged along by the downdraft, with the stock shedding 9.3% on 4 June alone.

Yet retail investors stepped in forcefully. On the Interactive Investor platform, 63% of the morning orders were buys — a measure of private?investor confidence that, for now, has been overwhelmed by institutional selling pressure.

Operational Gains That Tell a Different Story

Underneath the price turbulence, ITM Power’s business fundamentals continue to improve. In the first half of fiscal 2026, the company posted record revenue of £18 million, while the full?year forecast has been raised to £40?43 million, representing roughly 35% year?on?year growth. The order book stands at £152 million, with 71% of those contracts considered profitable. The EBITDA loss narrowed from £16.8 million to £11.9 million in the half, fuelling optimism that the breakeven target is drawing closer. Morgan Stanley now expects EBITDA breakeven in fiscal 2028, a full year earlier than its previous estimate.

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The company’s balance sheet is also receiving a substantial boost. The UK’s state?owned Great British Energy invested £40 million in exchange for a 10.4% stake, making it the second?largest shareholder. Additionally, a £46.5 million government grant to automate ITM Power’s Sheffield plant — subject to Competition and Markets Authority approval — is expected to lift net liquidity to between £210 million and £215 million.

Analysts at Loggerheads

The analyst community is deeply divided. Jefferies stands out as the most bullish, raising its price target from 115 to 200 pence. Morgan Stanley joined the optimists by pulling forward its breakeven forecast. Berenberg maintains a “buy” rating but trimmed its target to 110 pence. UBS sits neutral at 60 pence. At the opposite end, Goldman Sachs remains the lone bear with a sell rating and a 63?pence target, questioning not the technology but the speed of commercialisation and the current valuation. Jefferies has warned that a negative outcome on the CMA grant decision would carry 52% downside risk.

Three Decisions That Will Define the Month

All eyes are on three binary events expected before June ends, each capable of redirecting the stock’s trajectory.

The Chronos grant. The CMA is due to rule on the £46.5 million grant for ITM Power’s automated “Chronos” production line. The company has indicated it will only take a final investment decision after that approval. Chronos is central to the firm’s scaling strategy: each stack delivers 2.5 MW — roughly triple the output of its predecessor — at 40% lower capital cost and with half the footprint. The planned annual capacity of 1 GW is viewed as a critical threshold for commercial competitiveness.

The HAR2 auction. The second UK hydrogen allocation round (HAR2) is set to award contracts for projects with a combined capacity of up to 875 MW. ITM Power has already been named the preferred supplier for two projects on the shortlist of 27, but both require final green lights from their developers. A successful HAR2 outcome would provide a visible revenue pipeline.

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Uniper’s final investment decision. The German energy group is expected to take a final investment decision this month on its Humber H2ub project. ITM Power has signed a front?end engineering and design (FEED) contract for the project, which would require six of its 20?MW modules. Planning permission was granted in March, and a positive FID would convert a significant order from pipeline to backlog.

External Validation and the Road Ahead

ITM Power’s technology received a nod of approval at the World Hydrogen Summit in Rotterdam, where the REFHYNE?2 project — a 100?MW electrolyser for Shell near Cologne — won two industry awards. Once operational in 2027, the plant is expected to produce up to 44,000 kilograms of renewable hydrogen daily.

The company’s full?year results are scheduled for 15 September 2026. By then, all three June decisions will have landed, providing a clearer picture of whether the stock’s 134% year?to?date rally was built on genuine operational momentum or on expectations that have yet to be fulfilled. For now, the next few weeks will determine whether the recovery attempt has legs — or whether the bears were right all along.

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ITM Power Stock: New Analysis - 8 June

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