The £1.15 Billion Hydrogen Bet That Has Analysts Scratching Their Heads

The disconnect between ITM Power's share price and what professional analysts think it's worth has rarely been starker. The Sheffield-based electrolyser manufacturer now commands a market capitalisation of roughly £1.15 billion, yet the average analyst target sits at just 84.60 pence — a chasm of about 45 percent below the current trading level of 154.80 pence.

That gap reflects a stock that has surged more than 400 percent from its May 2024 nadir of around 30 pence, leaving fundamentals in the dust by conventional measures. The shares now trade at roughly 38 times revenue, a punchy multiple for a company still posting operating losses. UBS, for one, holds firm at 60 pence, signalling that the valuation has run far ahead of the underlying business reality.

Operational Progress Meets Profitability Questions

The rally isn't built on thin air. ITM Power has delivered genuine operational improvements. First-half revenue for fiscal 2026 hit a record £18 million, prompting management to lift the full-year forecast to between £40 million and £43 million. The order book stands at £152 million, with 71 percent of contracts now deemed profitable — a marked improvement from the 60 percent recorded in April 2025 and a world away from the loss-making legacy projects that once weighed on the business.

Yet the bottom line remains stubbornly red. The company expects an operating loss of around £30 million for the full year, while its pretax loss recently widened to £45.4 million. A cash buffer of nearly £198 million, with zero debt, provides roughly five times coverage of current burn rates — enough breathing room, but not indefinite.

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

A Defining June on the Horizon

The next major inflection point arrives in June, when management must decide whether to greenlight the Chronos production line. This next-generation facility, carrying a £120 million price tag, is designed to manufacture electrolysers with double the power density from 2028 onward. CEO Dennis Schulz has already received 1.3 million shares as a special bonus tied directly to Chronos hitting its milestones — if the project falters, those shares vanish.

Government backing will be critical. ITM Power has already secured £40 million in equity from Great British Energy, and a decision on a further £46.5 million grant application is expected in June. The company is also awaiting the outcome of the UK's hydrogen allocation process and a final vote on the Uniper Humber project. A clean sweep of positive outcomes would likely keep support intact around the 130 pence level.

Europe and Beyond

International expansion is gathering pace. In Germany, contracts with the Stablegrid Group cover 710 MW of capacity, and a newly established Berlin subsidiary will handle project delivery. A capacity reservation agreement with RWE for 150 MW of Neptune V electrolysers, exercisable through 2027, adds further visibility. Further afield, ITM Power has secured a project with Octopus Energy Generation in Gravesend, a basic design package for Australia, and a front-end engineering contract for a Canadian hydrogen project powered by hydropower.

The company has also expanded its product suite with the ALPHA 50, a standardised hydrogen system priced at €50 million for the full package.

Retail Sells, Institutions Buy — For Now

The trading pattern tells its own story. On the AJ Bell platform, ITM Power recently topped the sell list, with more than 13 million shares changing hands in a single session as the stock dipped to 143.30 pence — textbook profit-taking after a prolonged rally.

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

Morgan Stanley sees things differently. The US bank expects ITM Power to reach operating breakeven by fiscal 2028, a year ahead of the consensus, citing lower capital costs and an improved risk profile. Its price target of 170 pence sits well above both the current share price and the analyst average.

Two big unknowns will shape the next leg of the journey: the UK hydrogen allocation process and the Chronos investment decision. If both deliver positive outcomes, the stock's recent support level near 130 pence should hold. If not, the gap to that 84.60 pence consensus target could narrow sharply — from below.

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ITM Power Stock: New Analysis - 7 May

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