ITM Power shares rally over 350% as hydrogen specialist partners with Rheinmetall for NATO synthetic fuels, secures £46.5M in UK grants, and ramps up gigawatt-scale production.
ITM Power has become one of the most dramatic turnaround stories on the London market, with its shares surging more than 350% over the past twelve months. The rally, which has pushed the stock to around 140-156 pence, reflects a potent combination of government backing, a new generation of electrolyser technology, and an unexpected foray into the defence sector.
The hydrogen specialist’s latest strategic move marks a significant departure from its traditional focus on civilian energy storage. A newly announced partnership with Rheinmetall will see the two companies collaborate on the “Giga PtX” project, aimed at producing synthetic fuels for NATO. The plan involves rolling out several hundred decentralised production facilities across Europe, each with a capacity of up to 50 megawatts, capable of generating thousands of tonnes of e-fuel annually.
State Backing Fuels Factory Expansion
At the heart of ITM Power’s growth strategy lies the Chronos electrolyser system, a next-generation platform that uses significantly fewer components than its predecessor, the Trident, while doubling power density. The company is building an automated gigawatt-scale production line to manufacture these units, backed by substantial public funding.
Great British Energy has committed £40 million to the project, while the Department for Energy Security and Net Zero has indicated further support of a similar magnitude. In total, the company has secured £46.5 million in government grants for the Chronos facility. The plant is expected to reach a nameplate capacity of one gigawatt by 2028, a milestone that has materially improved the group’s liquidity outlook for the current financial year.
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Record Revenues but Persistent Losses
The technological overhaul is being accompanied by a clear improvement in operating performance. ITM Power posted its highest-ever first-half revenue of £18 million, with £15.5 million coming from equipment sales. This prompted management to raise its full-year revenue guidance for 2026 to a range of £40-43 million in February.
The order book has swelled to £152 million, and the proportion of profitable contracts has climbed to 71%. RBC Capital Markets described the guidance revision as “modestly positive,” pointing to better project execution.
Yet the company remains firmly in the red. Expected operating losses (EBITDA) are hovering at nearly £30 million, and a sharply reduced net result underscores the ongoing profitability challenges. Analysts at Zeus Capital have raised their 2026 revenue forecast to over £40 million, but note that the group continues to burn cash. A solid financial cushion of roughly £198 million should keep operations running smoothly for now.
European Pipeline Fills Up
Alongside the UK manufacturing push, ITM Power’s project pipeline is expanding rapidly across Europe. In Germany, the company has secured agreements with the Stablegrid Group covering 710 megawatts, as well as with RWE. The Rheinmetall partnership opens an additional avenue into the defence sector’s e-fuel market.
A major milestone was reached in Wales, where a final investment decision was taken in the spring for the West Wales Hydrogen project. ITM Power will supply the core electrolysis module for the facility, which is expected to begin producing large volumes of hydrogen from 2028 and is tied to a long-term service contract.
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Valuation Gap Widens
The market’s enthusiasm has created a significant disconnect between the share price and analyst expectations. The stock closed the week at around 156 pence, well above its long-term average and far outstripping the consensus Wall Street price target of 98.64 pence.
All eyes are now on June, when the final investment decision for the Chronos project is due. A positive outcome would lock in the timeline for the gigawatt factory and provide the operational validation needed to support the current elevated valuation. With the defence sector now added to its addressable market, ITM Power finds itself at a crossroads where technology, geopolitics, and government policy are converging in unprecedented ways.
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