ITM Power’s June Reckoning: A Gigawatt Bet That Could Justify the Stock’s Sky-High Valuation

Hydrogen specialist ITM Power sees shares cool 10% in profit-taking, but all eyes are on June's final investment decision for the Chronos manufacturing line that will shape its future.

The hydrogen specialist that has seen its shares rocket more than 400% in the past year is now facing its sternest test — not from the market, but from a single decision scheduled for next month. The stock has already begun to cool, with profit-taking slicing roughly 10% off the price in a single session, but the real drama lies ahead.

Record Revenues, but the Red Ink Flows

Monday’s sell-off sent shares sliding to 143.30 pence, with a staggering 13.2 million shares changing hands — a 168% spike above the daily average. AJ Bell data shows ITM Power was the most-sold stock on its platform last week, a textbook case of investors cashing in after a breathtaking run from around 30 pence last May to a peak above 150 pence.

The selling pressure has largely ignored a solid operational update. For the first half of its 2026 fiscal year, the electrolyser maker posted record revenues of £18 million. Management has lifted full-year guidance to a range of £40 million to £43 million, up from previous expectations.

Yet profitability remains elusive. The operating loss is expected to come in at roughly £30 million, and while the gross loss narrowed to £6.5 million in the half, the company is still burning cash. Analysts at Zeus Capital note the balance sheet remains well-cushioned with nearly £198 million in cash reserves, but the path to sustainable profits is still under construction.

The Chronos Line: A £120 Million Pivot Point

All eyes are now on the planned Chronos manufacturing line in Sheffield. The facility is designed to produce PEM electrolysers with double the power density at significantly lower cost, targeting a production capacity of one gigawatt by 2028.

The project carries a £120 million price tag, and the financing is taking shape. Great British Energy, the state-owned entity, is expected to take a stake of just over 10%. The government has also pledged £46.5 million in grants, though the final approval hinges on a review that should conclude in June.

Management plans to make a final investment decision immediately after that review. The outcome will determine whether the company can deliver on its ambitious capacity expansion timeline — and whether the stock’s current valuation can be sustained.

A Defence Pivot Opens New Frontiers

Beyond the core industrial business, ITM Power is quietly building a presence in the defence sector. A strategic partnership with Rheinmetall targets the decentralised production of synthetic fuels for NATO forces under the so-called Giga-PtX project.

The plan envisions several hundred installations across Europe, each equipped with up to 50 megawatts of electrolysis capacity. The initial focus is on the UK market, where the technology would secure critical applications that cannot be directly electrified.

The civilian pipeline is also expanding. In Germany, ITM has secured agreements with RWE and the Stablegrid Group covering projects totalling more than 710 megawatts. In the UK, the company is earmarked as a supplier for multiple government-backed hydrogen initiatives.

Analysts Stay Cautious as the Stock Runs Ahead

Despite the operational progress, the sell-side remains sceptical. The average analyst price target stands at just 98.64 pence, well below the current level even after the recent pullback. The 50-day moving average sits at 75.09 pence, and as long as the stock holds above that level, the broader uptrend remains intact.

The order book offers some comfort: of the £152 million in outstanding contracts, 71% are now considered profitable, reflecting the company’s shift away from legacy loss-making projects. But with the stock trading far above analyst expectations, the June investment decision on the Chronos line will be the critical test. A green light could validate the rally; a delay could trigger a much deeper correction.