ITM Power: The 178p Rally That Has Analysts Drawing Battle Lines

ITM Power shares recover after ThyssenKrupp Nucera's weak results, but analyst targets range from 60p to 200p as bulls and skeptics clash on green hydrogen market readiness.

A sector-wide stumble courtesy of ThyssenKrupp Nucera briefly knocked ITM Power’s shares down last Tuesday, but the Sheffield-based electrolyser maker wasted no time recovering. After sliding nearly four percent to 156.80 pence on the rival’s weak second-quarter numbers — Nucera booked just €50 million in revenue as completed megaprojects left a gap in its order book — the stock roared back on Wednesday, touching a high of 178.40 pence on heavy volume. The turnaround, market watchers noted, looked partly driven by short-covering: reported short interest hovers at about three percent, with Helikon Investments holding a net position of 1.54 percent and Qube Research & Technologies 0.68 percent.

Yet beneath the daily noise lies a far more fundamental schism among analysts. Price targets for ITM Power now span a staggering 60 to 200 pence — a range that reflects not just valuation disagreements but clashing views on whether the green hydrogen market is finally ready for prime time.

Bulls Double Down on Execution

Jefferies recently lifted its target from 115 to 200 pence, maintaining a “Buy” rating. The case rests on higher earnings estimates, lower capital costs, and a more supportive policy backdrop. Even so, the bank flags a 52 percent downside risk in its cautious scenario, a clear nod that the stock’s 160 percent year-to-date surge has already priced in considerable optimism. Morgan Stanley went a step further, upgrading ITM Power to “Overweight” — its first positive call on a hydrogen equipment maker since 2021 — and raising the target from 60 to 170 pence. The bank sees the company reaching EBITDA breakeven as early as fiscal 2028, ahead of consensus, and forecasts revenue of £169 million, well above market expectations.

On the operational front, a strategic alliance with Worley is expected to help place ITM’s Neptune V electrolyser into mid-sized hydrogen projects, extending its commercial reach. Separately, a partnership with Rheinmetall focused on synthetic fuels adds another layer of stability. These deals, however, have yet to translate into a broad wave of demand.

Skeptics Hold Their Ground

UBS remains firmly on the sidelines, keeping its “Neutral” rating and 60-pence target. The bank warns that valuation has already run far ahead of operational progress. Berenberg, while more constructive than before, only edged its target from 100 to 110 pence. The gap between the most bullish and most bearish forecasts — 140 pence — is unusually wide and makes the stock unusually hard to handicap.

ITM Power’s first-half numbers offer ammunition to both camps. Revenue hit a record £18 million, and management raised full-year guidance to £40–43 million, driven mainly by equipment deliveries. The order book stands at £152 million, with 71 percent of contracts deemed profitable — a notable improvement after years of loss-making legacy projects. Yet the pre-tax loss widened to £45.4 million from £27.1 million a year earlier. The operational turnaround is visible but incomplete.

The Cash Cushion and the Chronos Question

What gives the bull case its backbone is the balance sheet. ITM Power holds around £200 million in net cash, providing several years of runway. In April it also secured an £86.5 million financing package, including £40 million in equity from Great British Energy — which already owns just over 10 percent of the company — and the remainder as a government grant for the Chronos production line.

That grant is now the linchpin. On May 26, the UK subsidy authority will decide on a £46.5 million grant for Chronos. If approved, management plans to make a final investment decision in June. A green light would accelerate the transition from prototype development to mass manufacturing. A refusal would leave the company reliant on its existing cash position and on converting project announcements into profitable sales — something the market has yet to see at scale.

Meanwhile, retail investors have been selling heavily, and trading volume on one recent day hit 13.2 million shares, 168 percent above average. An insider sale by technology chief Simon Bourne to cover tax obligations after option exercises also drew attention. For now, ITM Power remains a stock split by two forces: the tangible buffer of cash and the intangible uncertainty of when, and whether, the hydrogen market will deliver the orders needed to turn that green into black.