Share tips of the week – 6 May

ITM Power should benefit from the EU's plan to make half the hydrogen it uses “green” by 2030

(Image credit: © Alamy)

By MoneyWeek

published 6 May 2022

in Advice

Three to buy

ITM Power

Forecasts for hydrogen demand for the coming decade have gone from “speculative to hopeful and, now, spectacularly bullish”. The European Commission alone will have to invest £86bn to fulfil its goal to turn half of all hydrogen used in the bloc “green” by 2030. Electrolysis-unit manufacturer ITM Power is well-placed to benefit from this. Profits are not expected until 2026, even if a quarter of the hydrogen goals established by governments are met, but “its balance sheet should be up to the task”. The firm has plenty of cash and should not need to return to the market for more funding in the near future, even with “two new factories in the works”. This makes the prospect of shareholder dilution via an equity fundraising “unlikely to be a concern for some time yet”. 325p

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