A £1 Billion Hydrogen Bet Hangs in the Balance as ITM Power Faces a Defining June

ITM Power shares rocket 400% to £1B valuation, but profit-taking hits as analysts split on June's Project Chronos verdict and 170p target.

The past year has been nothing short of extraordinary for ITM Power. The London-listed hydrogen specialist has seen its share price rocket more than 400 percent in 365 days, transforming it into a £1 billion company. But the rally has hit a speed bump. Profit-taking has swept through the stock in recent days, with 13.2 million shares changing hands in a single session as retail investors rushed to lock in gains. The shares have since settled in a range between 130 and 135 pence, a retreat from the recent high of 154.80 pence.

The timing of the sell-off is no coincidence. All eyes are now fixed on June, when a decision on the company’s ambitious “Project Chronos” will land. That verdict will determine whether the stock’s sky-high valuation — a price-to-sales ratio of roughly 38 — is justified or ripe for a correction.

The Chronos Catalyst

At the heart of the narrative is a new PEM electrolyser manufacturing line in Sheffield. ITM Power plans to build the facility with a target of 1 gigawatt of annual production capacity by 2028. The technology promises to slash manufacturing costs by 40 percent while boosting efficiency — a leap that could finally put the company on a path to profitability.

The project is backed by substantial state support. Great British Energy is contributing a strategic equity investment of £40 million, while the UK energy ministry has pledged a further £46.5 million in grants. That combined £86.5 million package is still awaiting final regulatory approval on state aid grounds, with the outcome expected in June. A green light would unlock the funds and clear the way for a final investment decision by management.

A Deep Divide on Wall Street

The stock’s trajectory has split the analyst community wide open. Morgan Stanley fired a major salvo this week, upgrading ITM Power from “Equal-weight” to “Overweight” and more than doubling its price target from 60 pence to 170 pence. The bank’s analysts now expect the company to reach EBITDA breakeven in fiscal 2028 — a milestone that underpins their newfound optimism.

The upgrade triggered an immediate market reaction. Shares surged nearly 16 percent on Thursday, amplified by strong sector momentum after Bloom Energy announced a massive capacity deal with Oracle. But the euphoria was short-lived. By Friday, profit-taking had set in, with trading volumes spiking as sellers stepped in.

Not everyone is convinced. UBS remains cautious, rating the stock “Neutral” with a price target of just 60 pence — a far cry from the current level. The Swiss bank points to persistent losses and the long road ahead to profitability. The average analyst price target stands at 84.60 pence, a significant discount that underscores how far the stock has run ahead of consensus.

Mixed Signals on the Ground

Operationally, the picture is improving but far from clear. ITM Power posted a record first-half revenue of £18 million in fiscal 2026, with losses narrowing more than expected. Management responded by lifting the full-year revenue guidance, citing a more profitable order book. The company also boasts a net cash position of £215 million, providing a solid buffer against ongoing cash burn.

The project pipeline is swelling. In Germany, ITM Power has secured contracts totalling over 710 megawatts, with RWE and the Stablegrid Group as partners. The company is also locked into UK hydrogen initiatives as a key supplier. Yet the bottom line remains in the red, and the valuation leaves little room for error.

The June Reckoning

The next few weeks will be decisive. If the Chronos funding is approved, ITM Power will have the financial firepower to execute its expansion plan and accelerate its march toward profitability. A rejection, however, would leave the stock’s lofty multiple exposed — and the recent profit-taking could prove to be just the beginning of a deeper correction.

For now, the market is betting on a positive outcome. Whether that bet pays off will become clear when the verdict lands in June.