Update shared on27 Sep 2025
Fair value Increased 2.48%Analysts have raised their price target for InterContinental Hotels Group to £91.58, citing improved RevPAR expectations, robust earnings visibility, and strong free cash flow, despite near-term U.S. RevPAR pressures and a mixed outlook on immediate catalysts.
Analyst Commentary
- Bullish analysts cite the rebasing of RevPAR expectations, improving narrative, and IHG’s superior earnings visibility and strong free cash flow conversion as drivers for optimism.
- Underperformance year-to-date is attributed to higher U.S. exposure and weaker RevPAR across key geographies, but this is seen as already reflected in the share price.
- Mixed views persist, with some seeing Q2 results as evidence of the resilience of IHG’s operating model, yet highlighting limited upside due to a lack of near-term catalysts and sustained U.S. RevPAR pressure.
- Management confidence is noted, with continued growth in signings, increased loyalty contribution, and a large opportunity for conversions from independent and competing brands providing additional support.
- Foreign exchange fluctuations have had a marginal negative impact on price targets, even among analysts maintaining positive outlooks.
What's in the News
- IHG Hotels & Resorts announced the availability of U.S. development opportunities for Ruby Hotels, its 20th global brand, targeting cost- and style-conscious travelers in major U.S. city centers and expanding from its European base with 34 open or pipeline hotels (Key Developments).
- Ruby Hotels’ U.S. market debut is a notable milestone in IHG’s global expansion strategy, offering owners versatile options suitable for urban settings with barriers to entry, bolstering the company's premium urban lifestyle portfolio (Key Developments).
- InterContinental Hotels Group completed a share buyback program, repurchasing 3.8 million shares (2.41% of shares) for $425 million, as announced in February 2025 (Key Developments).
- The Board declared a 10% increase in the interim dividend to 58.6 cents per share, totaling approximately $270 million in dividends to shareholders for 2025 and indicating continued commitment to shareholder returns (Key Developments).
- IHG faced less investor unrest regarding executive pay plans than many European peers, with 69.5% of investors backing its executive compensation plan amid a broader trend of increased opposition across European listed firms (Reuters).
Valuation Changes
Summary of Valuation Changes for InterContinental Hotels Group
- The Consensus Analyst Price Target has risen slightly from £89.37 to £91.58.
- The Future P/E for InterContinental Hotels Group has risen slightly from 17.77x to 18.18x.
- The Discount Rate for InterContinental Hotels Group remained effectively unchanged, moving only marginally from 9.29% to 9.24%.
Disclaimer
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