The ink was barely dry on ITM Power’s long-awaited £86.5 million financing package for its Chronos gigawatt electrolyser line when the stock took another leg lower. Closing the week at €1.35, the shares shed 1.95% on Friday alone, bringing the seven-day decline to 8.51%. For investors who had watched the stock surge 14% the previous week on news that the Competition and Markets Authority had finally waved through the project, the official confirmation on Thursday felt more like a sell-the-fact moment than a catalyst for fresh upside.
The package itself is substantial. Britain’s Department for Energy Security and Net Zero is providing a £46.5 million grant, while the state-owned Great British Energy is chipping in a further £40 million as equity. The money is earmarked for a dedicated Chronos production line at ITM’s Sheffield facility, which will use the existing Trident manufacturing platform to produce stacks at an annualised capacity of up to 1 GW. Chief executive Dennis Schulz described the funding as “a decisive step” in scaling up output, and the presence of a government shareholder underscores the strategic importance London attaches to homegrown green hydrogen infrastructure.
Yet for all the official backing, the market’s mood is best described as cautious optimism laced with impatience. ITM Power continues to burn cash and report operating losses, even if net debt remains manageable. The half-year figures surprised to the upside — record revenue of £18 million and an order book that has swelled to £152 million — but the management’s full-year guidance of £40 million to £43 million in sales still leaves plenty of room for execution risk. The question that hangs over the stock is when that pipeline will translate into sustainable profitability.
There are, however, a few counterweights to the prevailing scepticism. Sir Warren East, a former chairman, added 172,000 shares to his holding on 29 June, a vote of confidence that insiders typically reserve for moments they consider undervalued. And ITM Power is quietly diversifying beyond its core electrolyser business. A cooperation with Germany’s Rheinmetall under the Giga PtX banner aims to build a Europe-wide network of decentralised synthetic fuel plants for NATO forces, reducing the company’s dependence on lumpy, one-off project sales. Together with the Chronos funding, the defence tie-up signals that ITM is trying to smooth out the revenue volatility that has long frustrated investors.
Should investors sell immediately? Or is it worth buying ITM Power?
Analyst opinion remains deeply fractured. Berenberg lifted its price target to 200 pence (roughly €2.37), implying substantial upside from current levels. Morgan Stanley has also turned more constructive. But Goldman Sachs sticks with a “sell” rating, fretting about long-term margins and sector headwinds, and the consensus sits at just 131 pence. The automated fair-value model from Simply Wall St recently raised its estimate from £1.19 to £1.31, a range that hugs the trading price and suggests the market has already priced in the near-term good news. The spread between the bulls and the bears is wide enough to keep the stock volatile — the 30-day annualised volatility stands at a dizzying 106%.
Technically, the chart tells a story of momentum that has run out of steam. At €1.35, ITM Power is 21.2% below its 50-day moving average of €1.72, though it remains comfortably above the 200-day line at €1.07. The relative strength index of 42 points to neutral-to-weak momentum without a clear directional signal. The shares have lost 47.44% since hitting a 52-week high of €2.58 on 29 May, but they are still up 109.10% from the February nadir of €0.65. Year-to-date, the gain is a punchy 86.77% — a reminder that this is a stock that moves in dramatic swings.
What comes next depends entirely on execution. The £86.5 million in state backing, the Rheinmetall partnership, and the insider buying all provide a cushion of confidence, but none of it will matter if the Chronos line cannot ramp up on schedule or if the order book fails to convert into cash. Until concrete production milestones and a credible path to profitability emerge, the gulf between ITM Power’s supporters and its sceptics is unlikely to narrow.
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