0R15 9025.0 0.0% 0R1E 9410.0 0.0% 0M69 None None% 0R2V 247.99 9682.643% 0QYR 1567.5 0.0% 0QYP 439.3701 -2.9016% 0RUK None None% 0RYA 1597.0 1.2682% 0RIH 195.55 0.0% 0RIH 191.4 -2.1222% 0R1O 225.5 9683.0803% 0R1O None None% 0QFP 10475.8496 107.8542% 0M2Z 252.573 0.2373% 0VSO 33.0 -7.3164% 0R1I None None% 0QZI 622.0 0.0% 0QZ0 220.0 0.0% 0NZF None None% 0YXG 222.05 -4.1318%
ITM Power PLC (LON: ITM)
ITM Power Plc is an FTSE AIM UK 50 Index listed company that designs and manufactures products that generate hydrogen gas based on Proton Exchange Membrane (PEM) technology. This technology only uses electricity (renewable) and tap water to generate hydrogen gas on-site and has a product offering capable of being scaled to 100MW+ in size.
Industry Trends
As per the International Agency report, in order to achieve the “Net Zero target” by 2025, the world needs 322 million tonnes of electrolytic hydrogen and a global electrolyser capacity of 3,585GW.
National electrolyser targets increased from 40GW to 144GW in the year, and the EU announced its new net-zero law. China also declared net-zero by 2060.
As the drive to achieve net-zero targets continue, the market for large scale electrolysis equipment to produce green hydrogen might increase, which could drive the growth of the company going forward.
Growth Prospects
Key Risks
Now we will analyse some key fundamental and shareholders statistics of ITM Power PLC
Financial and Operational Highlights (for the 12 months ended 30 April 2021 as of 13 September 2021)
(Source: LSE Website)
Share Price Performance Analysis
(Source: Refinitiv, Research done by Kalkine Group)
On 14 September 2021, at 11:27 AM GMT, ITM’s shares were trading at GBX 385.64, down by 6.81% against the previous day closing price. Stock 52-week High and Low were GBX 724.00 and GBX 220.50, respectively.
On a daily chart, ITM's price is sustaining around the lower Bollinger band. Hence, there could be an uptick in the stock price in the near term. Moreover, the 14-days RSI of ~32.80 is inching towards the oversold zone, indicating an upside potential in the stock price.
Valuation Methodology: EV/Sales Approach (NTM) (Illustrative)
Business Outlook
ITM reported a decent performance in FY21, with core revenue rising 30% YoY. The company was successfully able to reduce its losses by 9% while maintaining a solid cash position of £176.1 million. The Company completed the installation of the 10MW REFHYNE I project, with expansion by 100MW planned for REFHYNE II at Shell's Rhineland Refinery. The company maintains solid guidance for FY22, with Core stack module production to be more than 55MW and production volume to be between 22-50MW.
Considering the Company’s market leadership, its increased production volume, its continued investments, and support from the valuation as done using the above method, we have given a “Speculative Buy recommendation on ITM Power Plc at the current price of GBX 385.64 (as on 14 September 2021 at 11:27 AM GMT), with lower-double digit upside potential based on 99.82x EV/NTM Sales (approx.) on FY22E sales (approx.).
*The reference data in this report has been partly sourced from REFINITIV.
*All forecasted figures and Peer information have been taken from REFINITIV.
*Dividend Yield may vary as per the stock price movement.
*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.
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