A Hydrogen Stock Doubled in a Month — Then Its CTO Sold Shares

ITM Power shares surge over 100% in four weeks; CTO sells near peak as Morgan Stanley doubles price target, but consensus remains cautious.

The rally in ITM Power’s shares has been nothing short of extraordinary. Over the past four weeks, the stock has more than doubled, leaving even the most bullish analyst targets in the dust. But just as the momentum reached a fever pitch, the company’s chief technology officer stepped in to cash in — and the timing has raised eyebrows across the City.

Simon Bourne, ITM Power’s CTO, exercised options on 1.33 million shares on 30 April, acquired at a weighted average price of just 32 pence each under the company’s 2010 share option plan. He then sold roughly 873,000 of those shares at an average of 157.44 pence. The company described the transaction as a “sell-to-cover” exercise — a standard move to settle the tax liability arising from the option exercise. Bourne retains around 657,000 shares, representing just under 0.1% of the issued capital.

The sale occurred on the last trading day before the May Day bank holiday, right in the 157-to-159 pence zone that traders now identify as a technical resistance level. While the explanation is straightforward, the optics of an insider selling near the top of a blistering rally are hard to ignore.

Morgan Stanley’s dramatic U-turn

The same day Bourne was selling, Morgan Stanley delivered one of the most striking reversals in the clean energy sector in years. The US bank upgraded ITM Power from “Equal-weight” to “Overweight” and more than doubled its price target from 60 pence to 170 pence. It is the first positive rating Morgan Stanley has assigned to any hydrogen equipment maker since 2021.

The rationale: ITM Power could reach EBITDA breakeven as early as fiscal 2028 — a full year ahead of the consensus forecast. Morgan Stanley sees the company generating £169 million in revenue that year, against a consensus estimate of £109 million. The bank’s bull case puts the stock at 300 pence, while its bear case is 50 pence. The upgrade was driven largely by a reduction in the assumed cost of capital from 11% to 9%, reflecting a lower beta and improved risk profile.

The implied enterprise value in Morgan Stanley’s base case is nearly £1 billion — a staggering figure for a company that is still loss-making.

The analyst consensus tells a different story

Morgan Stanley’s conviction stands largely alone. The average analyst price target sits at 84.60 pence — roughly 45% below the current trading level. Berenberg has a buy rating but a target of just 110 pence. UBS remains at “Neutral” with a 60 pence target, signalling that the stock has run far ahead of the fundamentals.

The technical picture reinforces the caution. The relative strength index hit 91.77 — a level that historically signals an impending consolidation. The stock now trades 117% above its 200-day moving average. The price-to-sales ratio of around 38 underscores the valuation stretch.

A solid foundation — with one big asterisk

The operational story is not without substance. ITM Power raised its revenue guidance for fiscal 2026 to between £40 million and £43 million. The order book stands at £152 million, with 71% of contracts considered profitable — a marked improvement from the loss-making legacy projects that plagued the company. Net cash reserves of £215 million cover the current cash burn rate roughly five times over, according to analysts.

The fiscal year ended on 30 April, and the final results are expected by the end of October. Investors are also awaiting three specific catalysts: the outcome of the UK’s hydrogen allocation round 2, a potential final investment decision on Uniper’s 120-megawatt project at the Humber, and the FID for the new “Chronos” automated production line.

That last decision is the most consequential. A government grant of £86.5 million has been committed to support the Chronos line, but it remains subject to EU state aid approval — a decision expected in June. A green light would pave the way for the company’s targeted gigawatt-scale production capacity and provide concrete evidence that the share price rally is more than just speculative froth.

CEO Dennis Schulz, meanwhile, has received a package of 1.3 million shares that will only vest if strict conditions are met — including profitable contracts and on-time delivery of the Chronos line. The next scheduled update is set for 15 September.

For now, ITM Power sits at a crossroads. One of Wall Street’s biggest banks is betting on an accelerated path to profitability. The company’s own CTO has just taken money off the table. The market will have to decide which signal to follow.