Investor Fault Lines Emerge at ITM Power as Retail Sells Into Rally Ahead of May 26 Subsidy Ruling

The divergence between retail and institutional investors is widening at ITM Power. While the stock has surged roughly 160% since the start of the year, private shareholders are using the strength to head for the exits — leaving longer-term players to bet on a single government verdict that could shape the company’s next chapter.

On the AJ Bell platform, ITM Power recently ranked as the most-sold stock in a single session, when the share price slid to 143.30p on unusually heavy volume of 13.2 million shares. The move came after the stock hit a year high of 179.69p at the start of the week, before pulling back to 162.43p on Wednesday — a 3.49% decline that still leaves the equity trading near multi-year highs.

Institutions, by contrast, have held their ground. Their patience rests largely on a decision due May 26, when the UK subsidy authority is expected to publish its assessment of a £46.5 million grant for ITM’s Chronos production line in Sheffield. A green light would clear the way for a final investment decision in June, unlocking the next phase of the electrolyser maker’s industrial scaling plan.

Chronos is more than just another factory. The platform is designed to deliver 2-megawatt electrolyser units that cut costs by 40% compared with the existing Trident systems, with a targeted capacity of 1 gigawatt by 2028. The total financing package for the project stands at £86.5 million, including a £40 million equity injection from Great British Energy. CEO Dennis Schulz has tied his own compensation to achieving Chronos milestones — a signal of how central the programme is to management’s turnaround narrative.

Should investors sell immediately? Or is it worth buying ITM Power?

The operational progress has been real, albeit from a low base. First-half revenue for the 2026 financial year hit a record £18 million, and the full-year forecast has been raised to more than £40 million. The order book sits at £152 million, with 71% of contracts considered profitable — a marked improvement from earlier legacy projects that weighed on margins. Even so, the pretax loss widened to £45.4 million in the year to April 2025, compared with £27.1 million a year earlier. Profitability remains elusive, but a cash pile of roughly £198 million — and zero debt — gives the company time. Jefferies estimates the balance sheet provides runway at least into 2028.

Analyst opinions are as polarised as the shareholder base. Jefferies lifted its price target from 115p to 200p with a “Buy” rating, citing higher earnings expectations and lower discount rates. Morgan Stanley raised its target from 60p to 170p and upgraded the stock to “Overweight”, forecasting an EBITDA break-even by the 2028 fiscal year if ITM can secure around 200 megawatts of new orders. On the other side, UBS holds at “Neutral” with a 60p target, arguing the valuation already anticipates fundamentals that have yet to materialise.

Short sellers add another layer of volatility. The reported short interest is just under 3%, with Helikon Investments holding a net short position of 1.54% and Qube Research & Technologies at 0.68%. A sharp rally can force short covering, but any disappointment on May 26 could trigger equally swift reversals.

ITM Power at a turning point? This analysis reveals what investors need to know now.

Beyond Chronos, the calendar is packed with potential catalysts. The UK’s Hydrogen Allocation Round 2 is expected to bring news flow later in the year, and Uniper’s 120-megawatt Humber H2ub project — for which ITM has already won the FEED contract and will supply six POSEIDON modules — awaits a final investment decision. That project targets commercial operation in 2029. Morgan Stanley sees multiple triggers lining up for 2026.

For now, ITM Power remains a bet on timing and trust. The retail exodus suggests some investors are unconvinced the rally can sustain itself without concrete subsidy backing. The institutional hold signals confidence that the May 26 verdict will unlock a new growth trajectory. Between these two camps, the stock’s summer narrative will be written.

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ITM Power Stock: New Analysis - 13 May

Fresh ITM Power information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.

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