ITM Power Faces a Pivotal June as Three Catalysts Collide After a Brutal Week

ITM Power shares fell 23% after MSCI and Solactive index adjustments, but three major catalysts – Chronos FID, HAR2 awards, Uniper decision – could determine direction. Analyst views are polarized.

The past week was punishing for ITM Power. The stock closed Friday at €1.68, shedding 23.33% over the five sessions, after having hit a 2025 high of €2.58 on 29 May. Yet the year-to-date picture remains strikingly different: a 131% advance. The sharp reversal owes less to any deterioration in the hydrogen story than to index mechanics that have now largely played out.

ITM Power was added to the MSCI United Kingdom Small Cap Index on 29 May, triggering a wave of passive buying. That was followed by a sell-off from arbitrageurs and active traders who had built positions since mid-May. Compounding the pressure, the semi-annual rebalancing of the Solactive Hydrogen Select Index began on 2 June and concluded on 8 June. Such mechanical adjustments often amplify short-term moves, and this time was no exception.

With that technical overhang removed, attention shifts to three pivotal catalysts due this month. The most immediate is a final investment decision on the Chronos electrolyser programme, which hinges on a £46.5m grant from the UK government’s energy department. Approval would green-light a fully automated 1-gigawatt production line in Sheffield. ITM Power promises that Chronos stacks, rated at 2.5 MW each, will cut manufacturing costs by 40% and improve energy efficiency by 10% versus the current Trident technology. The company targets annual Chronos capacity of 1 GW by 2028. Management expects a decision in June — and analysts warn the stakes are high. Jefferies, which has a 200p price target on the stock, cautions that a failure to secure the grant carries a downside risk of more than 50% for the share price.

Two other events could prove equally decisive. The UK’s second hydrogen allocation round (HAR2) is expected to award contracts for up to 875 MW of capacity, and ITM Power is listed as a preferred supplier for two projects. Initial signals on the final allocation could emerge this month. Separately, Uniper is due to take a final investment decision on the first phase of its Humber H2ub project in Killingholme, where ITM Power is contracted to supply six Poseidon modules. All three catalysts — Chronos, HAR2, and the Uniper decision — are expected before the company’s next earnings release on 15 September.

The analyst community remains deeply divided. Goldman Sachs reaffirmed its sell rating and 63p target, calling the stock fundamentally overvalued. Jefferies, by contrast, lifted its target to 200p and stays extremely bullish, while Morgan Stanley now expects an operational break-even as early as fiscal 2028. The wide gap reflects the binary nature of the upcoming decisions.

Financially, the company is on firmer ground than in prior years. Great British Energy bought a 10.4% stake earlier this year by subscribing to new shares worth £40m. ITM Power expects net liquidity of £210m to £215m for the current financial year. Operating progress has also strengthened: first-half fiscal 2026 revenue hit a record £18m, the order book stands at £152m, and the operating loss has narrowed materially.

From a technical perspective, the RSI over 14 days has cooled to 42.3, far from overbought territory. The stock is now roughly a third below its late-May peak but still well above the February low of €0.65. The next major support lies at the 200-day moving average, currently near €0.99. If the three June catalysts deliver the hoped-for endorsements, the year’s rally gains a concrete foundation. If confirmations fail to materialise, another test of that line looms.