ITM Power’s Cromarty Bet and the Valuation Gap: Can Execution Catch the Share Price?

Despite a 173% rally, ITM Power shares trade 50% above fair value. New partnership with Protium for UK green hydrogen projects, plus £40M investment from Great British Energy.

A 173% rally since January has turned ITM Power into one of the year’s standout performers in London’s alternative energy space, yet the stock now trades more than 50% above the upper bound of most fair-value estimates. Analysts have lifted their price target to around 1.19 pounds — a 26% hike from the prior level — but the shares currently change hands at about 184.5 pence, leaving the consensus view deeply in the red. The forward price-to-earnings multiple of 170.53 underscores the extreme growth expectations baked into the current price, even as the projected net margin slipped to 5.43% and the discount rate edged up to 10.29%.

Against that backdrop, the company has just unveiled a strategic partnership that will test whether the operational story can keep pace with the market’s enthusiasm. On 3 June 2026, ITM Power and Protium Green Solutions formalised a collaboration aimed at industrial green hydrogen projects across Britain. The first venture is the Cromarty project in the Scottish Highlands, a 15-megawatt electrolysis facility capable of producing roughly seven tonnes of green hydrogen per day at peak output. Protium, which recently took over the project, will handle power procurement, permitting and off-take, while ITM Power supplies the electrolyser technology. The initial construction phase is expected to create around 30 local jobs and apprenticeship positions.

The partnership offers a flexible framework for future projects under the UK’s Hydrogen Allocation Rounds. ITM Power’s subsidiary Hydropulse can build and operate the plants under the “Hydropulse model”, or Protium can buy the electrolysers directly and run them itself. CEO Dennis Schulz described the arrangement as complementary, combining ITM’s technical delivery with Protium’s investment and operational skills for large hydrogen hubs. The final investment decision for Cromarty is pencilled in for December 2026 — a milestone that will serve as the first real test of the partnership’s ability to move from paper to steel.

Financially, the company is on stronger footing than it was at the start of the year. State-backed investor Great British Energy injected £40 million through a private placement of 71.99 million shares at 55.56 pence each, leaving it with roughly a 10.4% stake. That capital bolsters liquidity but also dilutes existing holders. A separate grant of £46.5 million from the Department for Energy Security and Net Zero (DESNZ) is awaiting final approval to fund the “Chronos” next-generation electrolyser platform — a 2.5-MW system that promises a 10% improvement in energy efficiency and a 40% reduction in system costs. The production line for Chronos is expected to create 250 new jobs.

Meanwhile, institutional interest remains robust. The BlackRock Smaller Companies Trust recently cited ITM Power as a key contributor to its second-quarter performance. Insider confidence is also visible: CEO Schulz and Simon Bourne each purchased 92 shares at 162 pence in mid-May, lifting total insider holdings to 8.73%. The shares traded around €2.23 on European exchanges on 3 June.

Beyond Cromarty, ITM Power has lined up additional projects. A ten-year service agreement with MorGen Energy for the 20-MW West Wales Hydrogen facility targets commercial operation in 2028. And the collaboration with Rheinmetall under the “Giga PtX” umbrella aims to supply hydrogen to NATO-related infrastructure. The broader UK renewable energy environment provides a tailwind: a record auction recently awarded contracts for nearly 5 GW of solar capacity, which could boost demand for grid?supportive electrolysers. The global hydrogen market is projected to reach $1.45 billion by 2034.

Yet the sector still wrestles with high production costs and the lack of harmonised international standards. For ITM Power, the narrative around hydrogen’s potential is compelling, but the share price has outpaced the fundamentals. The December FID for Cromarty — and the first output from the Chronos line — will show whether execution can finally close the gap.