LSE:IHG

Stock Analysis Report

InterContinental Hotels Group

Executive Summary

InterContinental Hotels Group PLC owns, manages, franchises, and leases hotels in the Americas, Europe, Asia, the Middle East, Africa, and Greater China.

Rewards

Trading at 16.5% below its fair value

Earnings are forecast to grow 11% per year

Risk Analysis

Has a high level of debt



Snowflake Analysis

Second-rate dividend payer with imperfect balance sheet.


Similar Companies

Share Price & News

How has InterContinental Hotels Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: IHG has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.1%

IHG

1.3%

GB Hospitality

2.3%

GB Market


1 Year Return

10.6%

IHG

17.9%

GB Hospitality

10.7%

GB Market

Return vs Industry: IHG underperformed the UK Hospitality industry which returned 17.9% over the past year.

Return vs Market: IHG matched the UK Market which returned 10.7% over the past year.


Shareholder returns

IHGIndustryMarket
7 Day1.1%1.3%2.3%
30 Day2.7%-1.5%2.5%
90 Day-2.5%2.2%3.0%
1 Year18.7%10.6%21.3%17.9%16.4%10.7%
3 Year46.8%27.0%35.3%21.3%21.3%5.8%
5 Year107.1%43.7%57.8%32.9%41.0%8.7%

Price Volatility Vs. Market

How volatile is InterContinental Hotels Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is InterContinental Hotels Group undervalued compared to its fair value and its price relative to the market?

16.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: IHG (£48.9) is trading below our estimate of fair value (£58.57)

Significantly Below Fair Value: IHG is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: IHG is poor value based on its PE Ratio (28x) compared to the Hospitality industry average (27.3x).

PE vs Market: IHG is poor value based on its PE Ratio (28x) compared to the UK market (17.6x).


Price to Earnings Growth Ratio

PEG Ratio: IHG is poor value based on its PEG Ratio (2.5x)


Price to Book Ratio

PB vs Industry: IHG has negative assets, so we can't compare its PB Ratio to the GB Hospitality industry average.


Next Steps

Future Growth

How is InterContinental Hotels Group forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

11.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: IHG's forecast earnings growth (11% per year) is above the savings rate (0.5%).

Earnings vs Market: IHG's earnings (11% per year) are forecast to grow slower than the UK market (12.3% per year).

High Growth Earnings: IHG's earnings are forecast to grow, but not significantly.

Revenue vs Market: IHG's revenue (2.4% per year) is forecast to grow slower than the UK market (3.5% per year).

High Growth Revenue: IHG's revenue (2.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if IHG's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has InterContinental Hotels Group performed over the past 5 years?

-5.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: IHG has high quality earnings.

Growing Profit Margin: IHG's current net profit margins (12.7%) are lower than last year (17.2%).


Past Earnings Growth Analysis

Earnings Trend: IHG's earnings have declined by -5.5% per year over the past 5 years.

Accelerating Growth: IHG's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: IHG had negative earnings growth (-19.2%) over the past year, making it difficult to compare to the Hospitality industry average (4.9%).


Return on Equity

High ROE: IHG's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is InterContinental Hotels Group's financial position?


Financial Position Analysis

Short Term Liabilities: IHG has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: IHG has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: IHG has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: IHG's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: IHG's debt is well covered by operating cash flow (23.5%).

Interest Coverage: IHG's interest payments on its debt are well covered by EBIT (8.6x coverage).


Balance Sheet

Inventory Level: IHG has a high level of physical assets or inventory.

Debt Coverage by Assets: IHG has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Next Steps

Dividend

What is InterContinental Hotels Group's current dividend yield, its reliability and sustainability?

1.85%

Current Dividend Yield


Dividend Yield vs Market

company1.8%marketbottom25%1.9%markettop25%5.1%industryaverage2.5%forecastin3Years2.1%

Current dividend yield vs market & industry

Notable Dividend: IHG's dividend (1.85%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.9%).

High Dividend: IHG's dividend (1.85%) is low compared to the top 25% of dividend payers in the UK market (5.06%).


Stability and Growth of Payments

Stable Dividend: IHG's dividend payments have been volatile in the past 10 years.

Growing Dividend: IHG's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (52.3%), IHG's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: IHG's dividends in 3 years are forecast to be well covered by earnings (41.8% payout ratio).


Next Steps

Management

What is the CEO of InterContinental Hotels Group's salary, the management and board of directors tenure and is there insider trading?

2.3yrs

Average management tenure


CEO

Keith Barr (48yo)

2.4yrs

Tenure

US$3,093,000

Compensation

Mr. Keith Barr has been the Chief Executive Officer of Intercontinental Hotels Group plc since July 1, 2017. Mr. Barr served as the Chief Commercial Officer of Intercontinental Hotels Group plc since May 2 ...


CEO Compensation Analysis

Compensation vs Market: Keith's total compensation ($USD4.12M) is about average for companies of similar size in the UK market ($USD4.88M).

Compensation vs Earnings: Keith's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

2.3yrs

Average Tenure

50.5yo

Average Age

Experienced Management: IHG's management team is considered experienced (2.3 years average tenure).


Board Age and Tenure

5.9yrs

Average Tenure

57yo

Average Age

Experienced Board: IHG's board of directors are considered experienced (5.9 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUK£40,18423 May 19
Nicolette Henfrey
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares800
Max PriceUK£50.23
SellUK£40,18423 May 19
Nicolette Henfrey
EntityIndividual
Role
Chief Legal Officer
Executive VP
Shares800
Max PriceUK£50.23
SellUK£99,45913 Mar 19
Kenneth Macpherson
EntityIndividual
Shares2,200
Max PriceUK£45.21
SellUK£154,25213 Mar 19
Yasmin Diamond
EntityIndividual
Shares3,412
Max PriceUK£45.21
SellUK£234,31713 Mar 19
Jolyon Bulley
EntityIndividual
Shares5,183
Max PriceUK£45.21
SellUK£461,30026 Feb 19
George Turner
EntityIndividual
Role
Chief Technology Officer
Chief Commercial & Technology Officer
Shares10,000
Max PriceUK£46.13

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Elie Maalouf (55yo)

    CEO of the Americas & Executive Director

    • Tenure: 1.9yrs
    • Compensation: US$2.29m
  • Keith Barr (48yo)

    CEO & Director

    • Tenure: 2.4yrs
    • Compensation: US$3.09m
  • George Turner (48yo)

    Chief Commercial & Technology Officer

    • Tenure: 0.8yrs
  • Paul Edgecliffe-Johnson (47yo)

    CFO, Group Head of Strategy & Executive Director

    • Tenure: 5.9yrs
    • Compensation: US$2.39m
  • Claire Bennett (53yo)

    Chief Marketing Officer

    • Tenure: 2.2yrs
  • Michael Torres

    Chief Communications Officer & VP of Corporate Communications - Americas Region

    • Tenure: 0yrs
  • Ranjay Radhakrishnan

    Chief Human Resources Officer

    • Tenure: 3yrs
  • Heather Wood

    VP & Head of Investor Relations

    • Tenure: 0yrs
  • Laura Miller (54yo)

    Chief Investment Officer

    • Tenure: 1.8yrs
  • Nicolette Henfrey

    Executive VP

    • Tenure: 0.8yrs

Board Members

  • Dale Morrison (70yo)

    Senior Independent Non-Executive Director

    • Tenure: 5.6yrs
    • Compensation: US$173.00k
  • Patrick Cescau (70yo)

    Non-Executive Chairman of the Board

    • Tenure: 6.9yrs
    • Compensation: US$442.00k
  • Ian Dyson (57yo)

    Independent Non-Executive Director

    • Tenure: 6.3yrs
    • Compensation: US$102.00k
  • Craig Hunt

    Vice-Chairman of Bass Hotels & Resorts Inc and Director of Bass Hotels & Resorts Inc

    • Tenure: 0yrs
  • Christopher Mayhew (66yo)

    Independent Non-Executive Director

    • Tenure: 8.4yrs
    • Compensation: US$76.00k
  • Elie Maalouf (55yo)

    CEO of the Americas & Executive Director

    • Tenure: 1.9yrs
    • Compensation: US$2.29m
  • Jill McDonald (53yo)

    Independent Non-Executive Director

    • Tenure: 6.5yrs
    • Compensation: US$91.00k
  • Keith Barr (48yo)

    CEO & Director

    • Tenure: 2.4yrs
    • Compensation: US$3.09m
  • Jo Harlow (57yo)

    Independent Non-Executive Director

    • Tenure: 5.3yrs
    • Compensation: US$101.00k
  • Paul Edgecliffe-Johnson (47yo)

    CFO, Group Head of Strategy & Executive Director

    • Tenure: 5.9yrs
    • Compensation: US$2.39m

Company Information

InterContinental Hotels Group PLC's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: InterContinental Hotels Group PLC
  • Ticker: IHG
  • Exchange: LSE
  • Founded: 1967
  • Industry: Hotels, Resorts and Cruise Lines
  • Sector: Consumer Services
  • Market Cap: UK£8.836b
  • Shares outstanding: 180.69m
  • Website: https://www.ihgplc.com

Number of Employees


Location

  • InterContinental Hotels Group PLC
  • Broadwater Park
  • Denham
  • Buckinghamshire
  • UB9 5HR
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
IHGNYSE (New York Stock Exchange)SPON ADR EACH REPR 1 ORDUSUSDFeb 1990
IC1BDB (Deutsche Boerse AG)SPON ADR EACH REPR 1 ORDDEEURFeb 1990
IHGLSE (London Stock Exchange)YesOrdinary SharesGBGBPMar 2003
IC1HDB (Deutsche Boerse AG)YesOrdinary SharesDEEURMar 2003
ICHG.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMar 2003
IHGLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPMar 2003
IC1HBST (Boerse-Stuttgart)YesOrdinary SharesDEEURMar 2003

Biography

InterContinental Hotels Group PLC owns, manages, franchises, and leases hotels in the Americas, Europe, Asia, the Middle East, Africa, and Greater China. The company operates hotels, resorts, and restauran ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/15 21:08
End of Day Share Price2019/12/13 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.