JP Morgan launches coverage of ITM Power

JP Morgan Cazenove has initiated coverage of renewable energy specialist ITM Power with an ‘overweight’ rating.

The bank said the Aim-listed hydrogen electrolyser manufacturer was a leader in its field with "strong partnerships and growth", and was now well placed to benefit from a new 1GW manufacturing facility in Sheffield.

It said: "This new facility should help ITM significantly increased electrolyser output and lower unit costs. We expect ITM to turn earnings before interest, tax, depreciation and amortisation positive by the 2023 full year, and free cashflow positive by the 2025 full year, as plant utilisation improves and demand for green hydrogen solutions rapidly increases."

JP Morgan concluded: "With global hydrogen electrolyser shipments likely to grow significantly to 2030, we estimate 34% average upside based on our three macro scenarios."

As at 1145 GMT, shares in ITM were ahead nearly 8% at 535.0p. JP Morgan has set a price target of 700p for the stock.