ITM Power Heads into a Decision-Rich June With Short Sellers Scattering and a NATO Fuel Deal in the Bag

Three binary events—Chronos FID, UK hydrogen allocation, and Rheinmetall partnership—could define ITM Power's future amid volatile stock movement.

It has been a volatile few days for the British electrolyser group. After being hoisted into the MSCI United Kingdom Small Cap Index at the end of May — a move that forced passive funds to buy near 27.6 million shares in a single session — ITM Power’s stock gave back 7% on no company-specific news, settling at 194.40 pence. The retreat erased a chunk of a rally that had taken the shares to a 52-week high of 219.80 pence and valued the group at roughly £1.45 billion. Yet beneath the headline noise, a trio of genuinely binary events awaits in June, and a rare strategic pivot into military synthetic fuels could alter the narrative entirely.

Three decisions effectively form a single make-or-break moment for the hydrogen pure-play. The most weighty is the final investment decision on Chronos, ITM’s next-generation electrolyser that triples output (2 MW per unit) while cutting costs by 40% and halving the physical footprint. A £46.5 million grant from the UK’s energy department has already been pledged for the 1 GW Sheffield factory, though the money remains subject to a subsidy approval decision expected this month — a technicality that could either unlock the FID or delay it. An additional £40 million injection via Great British Energy adds further heft. Management has indicated it will give the go-ahead for Chronos immediately after the grant is confirmed, targeting commercial operation by 2028.

Alongside Chronos, the UK government is expected to deliver results from Hydrogen Allocation Round 2, where 27 projects are competing for contracts. Among the bidders is Uniper’s Humber H2ub site in Killingholme, for which ITM is slated to supply six of its 20 MW POSEIDON modules. The government has said it will award contracts by the end of the year, but signals could emerge in June. Uniper itself is expected to take its own investment decision on the 120 MW first phase — with potential later expansion to over 200 MW — later this year. Given that planning permission is already in hand, a positive HAR2 outcome would give all parties the green light.

Away from the UK policy machinery, ITM has quietly opened a new front. A strategic partnership with Rheinmetall centres on producing synthetic fuels for NATO under the Giga-PtX banner. The project envisages several hundred decentralised production sites across Europe, each with electrolyser capacity of up to 50 MW, with an initial focus on UK locations. That is on top of a 150 MW capacity reservation with RWE and further agreements in Germany totalling 710 MW. The defence angle adds a layer of demand that is less dependent on green subsidies, and it helps explain why the stock has more than doubled over the past three months, outperforming peers such as Ballard Power, Plug Power and NEL.

Short sellers have been fleeing the equity. Reported short positions now account for only 1.77% of the share capital, down from a level that was already 40% lower at the end of April. Helikon Investments cut its stake from 1.46% in mid-May to 0.97%, and Qube Research & Technologies slipped below the 0.5% reporting threshold. The mechanics of short-covering have provided a steady tailwind while the broader market waits for the June catalysts to land.

The group’s operational turnaround is becoming more visible. First-half revenue hit a record £18 million, prompting management to lift the full-year forecast to £40–43 million — a roughly 35% increase year-on-year. The adjusted EBITDA loss narrowed from £16.8 million to £11.9 million. The order book stands at £152 million, with 71% of contracts deemed profitable or of high quality. Cash and equivalents amount to £210–215 million, with zero debt, and analysts at Morgan Stanley argue that no additional funding will be needed this decade. The bank, which upgraded the stock to overweight — the first positive rating on a UK hydrogen name since 2021 — sees EBITDA break-even as early as fiscal 2028, a year ahead of consensus.

Jefferies matched that bullish tone, lifting its price target from 115 pence to 200 pence with a buy recommendation. Berenberg also retains a buy, albeit with a more conservative 110 pence target, while UBS remains neutral at 60 pence. The 140-pence spread between the highest and lowest targets underscores the binary nature of the next few weeks: if all three decisions break in ITM’s favour, the current valuation might look cheap; any slip-up could trigger a sharp re-rating.

The next fixed point on the calendar is 15 September, when ITM will publish full-year results. By then, the Chronos FID, HAR2 awards and Uniper’s commitment should all be resolved. For now, the shares are pricing in a great deal of optimism. Whether that optimism is grounded in fundamentals or merely anticipation will become clear over the next 30 days.