ITM Power PLC (AIM:ITM) needs to turn customer interest into order growth but is in the hands of a “lacklustre” green hydrogen market, according to UBS analysts.
Analysts from the bank cut the clean technology company’s share price target from 65p to 60p on Wednesday as a result, alongside issuing a ‘neutral’ rating.
“Our view is ITM's management has enabled the company to be well-positioned for when the market inflects,” the bank said in a note.
However, “it is still unclear” when order momentum will begin to show, UBS added, as the company grapples with delays left from previous management and the market still shows a preference for proven rival technologies.
Following underwhelming revenue guidance of between £18 million and £22 million for 2025, issued in results earlier this month, UBS cut forecasts for the coming two years.
That said, improved production yields and strong cash of £230 million as of April showed “good signs” after ITM has evolved into a mass maker of electrolysers.
“ITM leads the proton exchange membrane (electrolyser) competition [and] offers a higher current density than peers,” such as alkaline electrolysers, UBS said.
“This is likely to be priced into higher market shares only when the order environment turns.”