ITM Power’s Shares Brace for a Month of Reckoning with Chronos, HAR2, and MSCI in the Spotlight

ITM Power faces key decisions in June including Chronos electrolyser FID and UK hydrogen allocation, with stock down 7% on index rebalancing but analyst upgrades.

June has arrived with a full slate of high-stakes decisions for ITM Power, and investors are already nursing a bruise from the index-induced volatility that closed out May. The stock fell 7 percent to 194.40 pence on 29 May, gyrating from a high of 219.8 pence as passive funds executed their mandatory buying in the closing auction while hedge funds unwound short positions. Trading volume surged to 27.6 million shares, more than double the typical daily run rate. The MSCI Small Cap Index inclusion triggered an estimated £25 million to £30 million of forced purchases, but the net effect was a classic rebalancing reversal that erased the pre-index gains.

Beyond the technical noise lies the real story: ITM Power’s future hinges on a series of strategic milestones that will unfold over the next four weeks. The centrepiece is the final investment decision on the Chronos electrolyser programme. The next-generation 2.5 MW unit promises to be 10 percent more energy-efficient, cut capital costs by 40 percent, and occupy half the footprint of its predecessors. A positive FID would green-light a fully automated 1 GW production line at the Sheffield gigafactory, with commercial output targeted for 2028. The decision is tied to a £46.5 million grant from the UK Department for Energy Security and Net Zero, which is awaiting state-aid clearance – a process expected to conclude this month before the contract can be formally signed.

Jefferies has flagged a stark consequence of a negative outcome: a potential 52 percent wipeout in the share price. Yet the bank maintains a “Buy” rating with a revised price target of 200 pence, up from 115 pence, citing improved earnings expectations and lower discount rates. Across the analyst community, seven rate the stock a buy, four a hold, and only one a sell.

Alongside the Chronos decision, the results of the second UK hydrogen allocation round are imminent. Twenty-seven projects have made the shortlist, including Uniper’s Humber H2ub in Killingholme. ITM Power is poised to supply six 20 MW Poseidon modules for the initial 120 MW phase, with commissioning scheduled for 2029 and a potential expansion beyond 200 MW. The government plans to award contracts by the end of 2026, but signals could come as early as June.

The financial backdrop is improving, albeit from a deeply loss-making base. ITM Power posted a record first-half revenue of £18 million and now expects full-year revenue of £40 million to £43 million – a 35 percent increase. Its order book stands at £152 million, with 71 percent of those contracts considered profitable, a marked shift from legacy deals that were signed at unsustainably low prices. Nevertheless, EBITDA remains in negative territory, with a projected loss of £27 million to £29 million, and the pretax loss widened to £45.4 million. Morgan Stanley forecasts an EBITDA breakeven in 2028, one year earlier than previously assumed, contingent on roughly 200 MW of new orders.

Liquidity has been bolstered by the arrival of Great British Energy as a cornerstone investor. The state-backed utility injected £40 million into ITM Power, taking a 10.4 percent stake, and separately placed a large order worth £86.5 million. The company raised its liquidity guidance to £210 million–£215 million, while year-end cash is expected to settle at £170 million–£175 million after investment.

On the operational front, progress at the 100 MW PEM electrolyser project in Lingen, Germany, and the ramp-up of the Sheffield gigafactory are critical to hitting the raised revenue target. If the share price holds near its current level, ITM Power’s market capitalisation of around £1.45 billion could earn it a spot in the FTSE GEIS Europe Index in September, triggering an estimated £35 million in additional passive inflows.

All three June catalysts – the Chronos FID, the HAR2 outcome, and the finalisation of the DESNZ grant – will be resolved before the company reports its next quarterly results on 15 September. Whether the post-MSCI correction was a healthy consolidation or the start of a deeper downturn now rests on the decisions made in the weeks ahead.