State Support vs. Market Skepticism: ITM Power Tumbles 27% Despite £86.5M Lifeline

It was the sort of week that leaves investors scratching their heads. ITM Power received a combined £86.5 million from the British government — a headline-grabbing injection — and yet the stock careered lower, shedding more than a quarter of its value in just seven sessions. On Friday alone, shares crashed 14 percent to €1.70, marking the heaviest one-day selloff in months.

The cash from Whitehall comes in two tranches: £40 million as an equity investment for a 10.4 percent stake, and a further £46.5 million in grants. Both are earmarked for automating the company’s Sheffield factory and advancing the Chronos electrolyser platform. Chronos, a 2.5 MW system, promises 40 percent lower capital expenditure and half the footprint of earlier generations. Berenberg responded by raising its price target from 100p to 110p, retaining a ‘Buy’ rating and labeling the state backing for the planned 1 GW production line a potential “gamechanger”.

Yet the positive news did not stop there. ITM Power formally sealed a partnership with Protium Green Solutions for the 15 MW Cromarty hydrogen project in Scotland, targeting daily output of around seven tonnes of green hydrogen. A final investment decision is penciled in for December 2026. The company also lifted its revenue guidance for the 2026 financial year to between £40 million and £43 million.

Despite that flurry of bullish developments, the market ran for the exits. The immediate catalyst came from across the Atlantic: a stronger-than-expected US jobs report — 172,000 new positions in May — reignited fears that the Federal Reserve would keep raising interest rates. Growth and clean-energy stocks got hammered globally. London’s AIM All-Share index fell 1.4 percent, and ITM Power was among the worst hit.

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

The selling was compounded by a sharp divergence in analyst opinion. Goldman Sachs reaffirmed its ‘Sell’ recommendation, lifting its target only marginally from 55p to 63p — still far below the prevailing share price. Morgan Stanley, by contrast, raised its target to 170p. The gulf of more than 100 pence between two Wall Street heavyweights underscores just how unsettled the market is on ITM Power’s fair value.

Technical factors also played their part. ITM Power had been added to the MSCI UK Small Cap Index at the end of May, triggering a wave of buying from index-trackers and hedge funds. Once the rebalancing was complete, those arbitrage positions were unwound, accelerating the decline. The stock’s 52-week high of €2.58, set on May 29, now looks distant; the shares have surrendered roughly 35 percent from that peak. The relative strength index has dropped to around 42.5, indicating that the prior overbought condition has fully dissipated.

Nor was ITM Power alone in its misery. Ballard Power Systems tumbled about 19 percent on the same day, and Plug Power lost roughly 12 percent. The sector also absorbed a blow from Clean Power Hydrogen (CPH2), which reported irreparable damage to a pilot electrolyser unit, suspended its shares and announced a strategic overhaul — a reminder of the risks still embedded in hydrogen technology.

ITM Power at a turning point? This analysis reveals what investors need to know now.

Even after the rout, ITM Power’s year-to-date gain stands at a remarkable 131 percent, though the annualized 30-day volatility of over 103 percent is a stark warning. The company ended the period with roughly $198 million in cash, giving it runway to scale production. But net losses persist, and the path to profitability remains the central question. With a Goldman ‘Sell’ in one ear and a Berenberg ‘Buy’ in the other, the market’s verdict this week was unmistakable: good news is not enough until it shows up in earnings.

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ITM Power Stock: New Analysis - 6 June

Fresh ITM Power information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.

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