Citi has modified its price target for InterContinental (IHG, Financial), increasing it from 7,500 GBp to 7,800 GBp. Despite this upward revision, the investment firm continues to hold a Sell rating on IHG shares. This suggests that Citi anticipates limited upside in the stock's performance, advising caution to investors considering their exposure to IHG.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 2 analysts, the average target price for InterContinental Hotels Group PLC (IHG, Financial) is $127.12 with a high estimate of $139.00 and a low estimate of $115.23. The average target implies an upside of 2.99% from the current price of $123.42. More detailed estimate data can be found on the InterContinental Hotels Group PLC (IHG) Forecast page.
Based on the consensus recommendation from 2 brokerage firms, InterContinental Hotels Group PLC's (IHG, Financial) average brokerage recommendation is currently 1.5, indicating "Buy" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for InterContinental Hotels Group PLC (IHG, Financial) in one year is $149.85, suggesting a upside of 21.41% from the current price of $123.42. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the InterContinental Hotels Group PLC (IHG) Summary page.
IHG Key Business Developments
Release Date: February 18, 2025
- RevPAR Growth: Increased by 3% with improved momentum in Q4.
- Gross System Growth: Achieved 6.2% growth.
- Net System Growth: Recorded 4.3% growth.
- Room Signings: Signed 106,000 rooms across 714 hotels, a 34% increase over 2023.
- Fee Margin Expansion: Expanded by 190 basis points.
- EBIT Growth: Increased by 10%.
- Adjusted EPS Growth: Grew by 15%.
- Share Buyback Program: Completed $800 million program; announced new $900 million program.
- Shareholder Returns: Over $1 billion returned in 2024; expected over $1.1 billion in 2025.
- Acquisition: Acquired the Ruby brand for $116 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- InterContinental Hotels Group PLC (IHG, Financial) reported a 3% growth in RevPAR, with momentum improving across all regions in Q4.
- The company achieved gross system growth of 6.2% and net system growth of 4.3%, marking the third consecutive year of accelerating system growth.
- IHG signed 106,000 rooms across 714 hotels, a 34% increase in signings over 2023.
- The company expanded its fee margin by 190 basis points, driven by operating leverage and new ancillary fee agreements.
- IHG completed an $800 million share buyback program and announced a new $900 million buyback program, returning over $1.1 billion to shareholders in 2025.
Negative Points
- In the Americas, fee growth was only up 1% in the second half, despite a 3% increase in RevPAR, due to certain one-time costs.
- In China, while there was a strong year of signings, openings and signings were down in Q4, raising concerns about the development picture.
- The company faces increased competition and costs in the industry, particularly regarding key money, which is expected to remain elevated.
- There is uncertainty regarding the impact of potential US policy changes on employment costs and hotel operations.
- Disruptions from climate change, such as natural disasters, pose ongoing risks to IHG's operations and future signings.
