ITM Power’s Insider Exodus and Grant Gamble Test a 400% Rally

ITM Power's shares surge as institutions pile in, but technical director sells, CEO's stake is performance-linked, and analysts diverge ahead of a make-or-break subsidy decision.

The technical chief is cashing out, the chief executive’s stake is tied to targets, and retail investors are taking profits — but institutions keep buying. ITM Power’s dizzying twelve-month run has created a rare split in sentiment, just as a make-or-break subsidy decision looms.

Simon Bourne, the company’s technology director, recently exercised options over roughly 1.3 million shares and sold the bulk at an average price of 157.44 pence. ITM says the sale was purely to cover a tax liability. Bourne still holds close to 656,000 shares. Chief executive Dennis Schulz has taken a different approach: his own 1.3 million shares are performance-linked and will only vest if ITM secures profitable contracts and brings the new Chronos production line online on schedule.

Private investors have been locking in gains during the latest leg of the rally, with ITM Power featuring among the most-sold stocks on platforms such as AJ Bell. Institutional buyers, however, have kept piling in. That clash pushed single-day trading volume to 13.2 million shares — 168% above the daily average — and briefly lifted the stock to 174.80 pence.

The latest surge was sparked by a strategic alliance with engineering group Worley, which plans to integrate ITM’s Neptune V electrolyser into medium-scale hydrogen projects. The deal opens a direct channel to external project pipelines, complementing ITM’s own build-own-operate business via its Berlin subsidiary Hydropulse.

Analysts are deeply divided on where the stock goes from here. Morgan Stanley upgraded ITM to “Overweight” — its first positive rating on any stock in this sector since 2021 — with a 170 pence price target. The bank forecasts an operational break-even by fiscal 2028, earnings before interest, tax, depreciation and amortisation of £13 million this year (the consensus is a £4 million loss), and revenue of £169 million, 54% above the consensus estimate.

Jefferies is even more bullish, lifting its target to 200 pence and pointing to lower capital costs and an improving political backdrop. Yet it warns of an asymmetric risk profile: the downside scenario implies a 52% loss, while the upside is only 37%. UBS remains sceptical, sticking with “Neutral” and a 60 pence target, arguing that the valuation has run far ahead of the fundamentals.

The operational picture is improving, albeit from a low base. First-half revenue for fiscal 2026 hit a record £18 million, prompting management to raise the full-year guidance to between £40 million and £43 million. The order book now stands at £152 million, with 71% of contracts deemed profitable — a sharp departure from the loss-making legacy deals that weighed on earlier periods.

But the bottom line remains deep in the red. The pretax loss for the year through April 2025 widened to £45.4 million from £27.1 million a year earlier. A cash pile of roughly £198 million — helped by a 10% stake held by the UK government via Great British Energy — gives the company enough runway to cover its current burn rate about five times over. Analysts say ITM, which is debt-free, should not need fresh capital before the end of the decade.

Two catalysts could determine whether the rally has legs. On 26 May the UK subsidy authority will rule on a £46.5 million grant application for the Chronos production line. If the verdict is positive, management intends to take a final investment decision in June. Chronos would build an automated line in Sheffield with an annual capacity of 1 GW, and the next-generation electrolyser is designed to triple output while slashing production costs by 40%.

Beyond that, the market is awaiting the results of the UK’s second Hydrogen Allocation Round and a final investment decision on Uniper’s 120 MW Humber H2ub project. RWE has already reserved 150 MW of Neptune V capacity through 2027, and agreements in Germany with RWE and Stablegrid cover more than 710 MW. Separately, ITM is working with defence group Rheinmetall to build a European network for synthetic fuels to supply NATO forces.

The relative strength index recently touched 91, a classic overbought signal. Whether the spate of regulatory decisions this summer can justify the valuation will become clear once the June grant verdict lands. For now, the conflicting moves by insiders and the chasm between analyst targets suggest that ITM Power remains a high-wire act.