The 400% Rally That Has Split Wall Street on ITM Power

ITM Power shares quadruple in a year, but analysts clash on valuation. Retail investors sell while institutions buy, with HAR2, Uniper, and Chronos factory decisions looming.

ITM Power’s stock has more than quadrupled over the past twelve months, surging roughly 400% from the lows seen in May 2025. But the blistering run has exposed a deep fracture among analysts: some see a hydrogen revolution taking shape, while others warn the valuation has left fundamentals in the dust.

The divergence is stark. Jefferies recently lifted its price target from 115 pence to 200 pence, maintaining a buy rating on expectations of margin improvements and a friendlier political backdrop for green hydrogen. Morgan Stanley went even further, nearly tripling its target from 60 pence to 170 pence — the first positive call on a hydrogen electrolyser maker since 2021. The bank sees ITM Power reaching EBITDA breakeven in fiscal 2028, a year ahead of consensus, with revenue hitting £169 million versus the market’s £109 million estimate.

Berenberg also recommends buying the stock, albeit with a more conservative target of 110 pence. On the other side, UBS stands firm at 60 pence, effectively arguing that the rally has run too far, too fast.

Even the bulls acknowledge the risks. Jefferies warns of an asymmetric risk profile: in a bear case, the shares could fall 52%, while the upside potential is just 37%. That sobering math helps explain why retail investors have been heading for the exits.

Retail Sells, Institutions Buy

Around the 171-pence level, more than 13 million shares changed hands in a single trading session — 168% above the daily average. On platforms like AJ Bell, ITM Power dominated the sell lists, with roughly one in every fifty trades being an ITM sale. For investors who bought in at around 30 pence in May 2025, the gain is nearly 500%. Many are now locking in profits.

Institutional buyers, however, appear to be stepping in. The disconnect between retail selling and institutional accumulation suggests a battle over whether the stock’s trajectory is sustainable.

Three Catalysts That Could Settle the Debate

The coming weeks will test whether the rally has legs. Three key events are on the horizon.

First, the UK’s Hydrogen Allocation Round 2 (HAR2) is expected to announce results, potentially triggering final investment decisions for several projects in ITM Power’s pipeline. Twenty-seven projects have been shortlisted.

Second, Uniper’s 120-megawatt Humber H2ub project in Killingholme has already secured planning permission. ITM Power is slated to supply six 20-MW POSEIDON electrolyser modules, with commissioning targeted for 2029. A positive investment decision, expected in 2026, would shift this contract from the pipeline into the order book.

Third — and most consequential — is the decision on the Chronos factory. This new 1-gigawatt manufacturing line would triple output per unit and cut costs by 40%. The company’s management has said it will decide immediately after receiving approval from the UK’s subsidy control authority, a ruling expected in June. A £46.5 million grant package hangs on that decision.

CEO Dennis Schulz has received a special allocation of 1.3 million shares that will only vest if Chronos hits specific milestones — a clear signal that management is betting on the factory’s success.

Revenue Records, But Losses Widen

ITM Power posted a record first-half revenue of £18 million for fiscal 2026, with full-year guidance raised to between £40 million and £43 million. Jefferies expects roughly £41 million. The order book stands at £152 million, with 71% of contracts now considered profitable — a marked improvement from earlier loss-making projects.

The company also holds a capacity reservation with RWE for 150 MW and agreements in Germany totaling more than 710 MW.

But the bottom line tells a different story. The pretax loss for the fiscal year ending April 2025 widened to £45.4 million from £27.1 million a year earlier. The cash balance of roughly £198 million covers the current burn rate about five times over, and Jefferies believes the company won’t need fresh capital until at least 2028. Profitability, however, remains a target for 2028 at the earliest.

The full-year results for the period ending April 2025 are expected to be published in late October. By then, the decisions on HAR2, Uniper, and Chronos should reveal whether the rally is built on substance — or simply on hope.

For now, the stock trades at a price-to-sales ratio of around 38. Its relative strength index hit nearly 92 during the rally, and the shares are 117% above their 200-day moving average. Those are the kind of numbers that make bulls salivate — and bears sharpen their claws.