At UK£86.60, Is It Time To Put InterContinental Hotels Group PLC (LON:IHG) On Your Watch List?

Today we're going to take a look at the well-established InterContinental Hotels Group PLC (LON:IHG). The company's stock saw a decent share price growth of 17% on the LSE over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine InterContinental Hotels Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

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What Is InterContinental Hotels Group Worth?

According to our valuation model, InterContinental Hotels Group seems to be fairly priced at around 8.8% below our intrinsic value, which means if you buy InterContinental Hotels Group today, you’d be paying a fair price for it. And if you believe the company’s true value is £94.91, then there’s not much of an upside to gain from mispricing. Furthermore, InterContinental Hotels Group’s low beta implies that the stock is less volatile than the wider market.

View our latest analysis for InterContinental Hotels Group

Can we expect growth from InterContinental Hotels Group?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. InterContinental Hotels Group's earnings over the next few years are expected to increase by 47%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? IHG’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on IHG, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. You'd be interested to know, that we found 2 warning signs for InterContinental Hotels Group and you'll want to know about these.

If you are no longer interested in InterContinental Hotels Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.