ITM Power’s Next Two Months Will Test Whether the 400% Rally Is Built on Hope or Reality

The analyst community is as split on ITM Power as it has ever been, and the next few weeks are likely to settle the argument. The hydrogen specialist’s shares have more than quadrupled over the past twelve months, but with a Relative Strength Index touching 91 — deep in overbought territory — the risk of a sharp reversal is as real as the upside potential. A flurry of regulatory and commercial decisions in May and June will either vindicate the bulls or hand the bears the evidence they have been waiting for.

The most immediate catalyst came from a strategic alliance with the engineering firm Worley, which drove a single-session surge of 16% and lifted the stock to 174.80 pence. Trading volume exploded to 13.2 million shares, 168% above the daily average, as Worley committed to integrating ITM’s Neptune-V electrolyser into its mid-sized hydrogen projects. The deal opens a direct pipeline to external project portfolios, complementing the company’s own development work through its Berlin-based subsidiary, Hydropulse, which builds, owns and operates decentralised green hydrogen plants under long-term offtake contracts.

Three banks, three verdicts

Morgan Stanley has upgraded the stock to “Overweight” — the first positive rating the bank has issued on any UK hydrogen name since 2021. Its price target stands at 170 pence, and it forecasts an operating break-even as early as fiscal 2028, with EBITDA of £13 million for this year against a consensus estimate of a £4 million loss. Revenue, in its view, will reach £169 million — a full 54% above the average analyst projection. Jefferies is even more bullish, lifting its target to 200 pence, citing lower capital costs and a friendlier policy backdrop. Yet it warns of an asymmetric risk profile: the downside scenario implies a 52% loss, while the upside offers only 37% potential.

UBS remains the outlier, sticking with a “Neutral” rating and a 60-pence target. The Swiss bank argues that the stock price has run far ahead of the fundamentals, a view that the recent overbought signals tend to support.

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

Record orders, widening losses

The underlying business is moving in the right direction, albeit slowly. First-half revenue hit a record £18 million, and the full-year guidance has been raised to between £40 million and £43 million. The order backlog stands at £152 million, with 71% of contracts now considered profitable. On the cost side, the pre-tax loss for the fiscal year ended April 2025 widened to £45.4 million from £27.1 million a year earlier. ITM holds around £198 million in cash, enough to cover its current burn rate roughly five times over.

The commercial pipeline provides ballast for the bull case. RWE has booked a capacity reservation of 150 MW of Neptune-V electrolysers through 2027, while agreements with RWE and the Stablegrid Group in Germany cover projects totalling more than 710 MW. Separately, ITM has teamed up with Rheinmetall on the Giga PtX project, which aims to build a European network of decentralised synthetic fuel plants supplying NATO forces. Each plant would produce up to 7,000 tonnes of e-fuel annually.

The make-or-break calendar

The coming weeks will be the real test. On 26 May, the UK subsidy authority publishes its evaluation of a £46.5 million grant application for the Chronos production line in Sheffield. If the verdict is positive, management intends to take a final investment decision in June. Chronos would establish an automated manufacturing line with an annual capacity of one gigawatt, and the next-generation electrolyser is expected to triple output per unit while cutting production costs by 40%. The UK government has a direct interest in the outcome: through Great British Energy, London holds just over 10% of ITM’s equity.

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

Also on the June agenda are the results of the second UK Hydrogen Allocation Round and Uniper’s final investment decision on the 120 MW Humber H2ub project, where ITM would supply the electrolyser. CEO Dennis Schulz has personal skin in the game — his bonus payments are contingent on the Chronos line starting on schedule. With the stock already pricing in much of the optimism, the next two months will determine whether the rally has further to run or whether the bears have been right all along.

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ITM Power Stock: New Analysis - 15 May

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