A Hydrogen Stock That’s Doubled the Market — and Now Faces Its Biggest Test

ITM Power shares soar 400% in 12 months but pull back 7.4% amid profit-taking. June decision on £120M Chronos line, state backing, and defence deal with Rheinmetall loom.

The numbers are eye-catching. ITM Power’s share price has surged roughly 400 percent over the past twelve months, leaving most of the London market in its wake. But after hitting a weekly high of 166.50 pence, the stock has pulled back 7.4 percent to trade around 154.80 pence. Profit-taking, not panic, drove the retreat — and the real test is yet to come.

June is shaping up as a pivotal month for the Sheffield-based electrolyser manufacturer. Management is set to decide on the Chronos production line, a fully automated facility designed to slash the cost of making electrolyser stacks. The price tag: £120 million. The ambition: one gigawatt of annual capacity by 2028.

State Backing and a Defence Tie-Up

The funding picture is already taking shape. Great British Energy, the state-owned energy company, has subscribed for new shares worth £40 million, securing a 10.8 percent stake in ITM Power. On top of that, the Department for Energy Security and Net Zero has pledged a £46.5 million grant — money earmarked for the Chronos line.

Outside the UK, the company is forging new alliances. A strategic partnership with Rheinmetall targets the defence sector, with plans for a Europe-wide network of decentralised plants producing synthetic fuels for NATO forces. Each plant could have up to 50 MW of electrolysis capacity, starting with the British market.

In Germany, ITM Power has signed contracts with the Stablegrid Group covering 710 MW of capacity, and a new Berlin-based subsidiary will oversee project execution.

Revenue Rising, Losses Lingering

Operationally, the trend is improving. ITM Power lifted its full-year revenue guidance to between £40 million and £43 million, after posting a record first-half revenue of £18 million for fiscal 2026. The order book stands at £152 million, with 71 percent of those contracts considered profitable — a marked improvement from the loss-making legacy projects that weighed on earlier results.

Yet profitability remains elusive. The company expects an operating loss of roughly £30 million for the full year, and its first-half gross loss came in at £6.5 million, though that represents a narrowing. A cash buffer of nearly £198 million provides breathing room, but the clock is ticking.

Analyst Divergence, Technical Extremes

The analyst community is deeply split. Seven of the eleven analysts covering the stock rate it a buy, but the average price target sits at just 101 pence — well below the current market price. Morgan Stanley stands out, raising its target to 170 pence and forecasting an operating breakeven as early as fiscal 2028. Only one analyst has a target above the market, at 310 pence.

Technically, the stock looks stretched. It trades more than double its 200-day moving average of 71.66 pence and has gained 157 percent since the start of the year. Retail investors remain engaged: on the Monday following the weekly high, buy orders accounted for 76 percent of trading activity on Interactive Investor.

The June Catalyst

CEO Dennis Schulz has strong personal incentives to deliver. He received a package of 1.3 million shares, vesting only if strict conditions are met — including profitable contracts and the on-time delivery of the Chronos project.

Beyond Chronos, investors are also awaiting the outcome of the UK hydrogen allocation round and a final decision on the Uniper Humber project. A positive verdict on either would provide further support for the stock’s elevated valuation.

For now, the chart support at 130 pence is the level to watch. If Chronos gets the green light and the state funding flows, the current rally could have further to run. If not, the gap between the share price and the analyst consensus may start to close — fast.