Berenberg nudges up target price on ITM Power

(Sharecast News) - Analysts at Berenberg nudged up their target price on ITM Power from 100p to 110p on Tuesday after the hydrogen economy company secured roughly £86.5m of UK government funding, through an equity investment of £40m by Great British Energy and a potential grant from the UK Department for Energy Security and Net Zero of £46.5m.

Berenberg, which has a 'buy' rating on the stock, said the proceeds would support ITM Power's establishment of a new large-scale automated manufacturing line in the UK, with an annual capacity of one gigawatt for the firm's next-generation Chronos electrolyser stack.

"We think that the investment is a compelling endorsement of ITM's technology, as well as a clear demonstration of the UK government's commitment to promoting UK manufacturing capability in the sector, helping to underpin the country's ambitious hydrogen targets as part of its hydrogen allocation round funding programmes," said Berenberg.

"In our view, this boost to its production capacity, alongside the launch and development of Chronos, is set to be a gamechanger for ITM and a strong platform for further growth."

Berenberg updated its numbers to incorporate the cash investments and expected capex from the new manufacturing line, with the German bank leaving its near-term revenue and underlying earnings numbers unchanged, but highlighting "the significant platform" the investment provides.

Reporting by Iain Gilbert at Sharecast.com