InterContinental Hotels Group Valuation

Q: What is the Fair Price of IHG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

IHG (£96.44) is trading above our estimate of [[fair value]] (£89.54)

Is IHG undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

Below Fair Value
Significantly Below Fair Value
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of IHG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: IHG (£96.44) is trading above our estimate of fair value (£89.54)

Significantly Below Fair Value: IHG is trading above our estimate of fair value.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for IHG?

Key metric: As IHG is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for IHG. This is calculated by dividing IHG's market cap by their current earnings.
What is IHG's PE Ratio?
PE Ratio	30.1x
Earnings	US$638.00m
Market Cap	US$19.21b

IHG key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	5.7x
Enterprise Value/EBITDA	21.7x
PEG Ratio	2.8x

Price to Earnings Ratio vs Peers

How does IHG's PE Ratio compare to its peers?

The above table shows the PE ratio for IHG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	27.1x
WTB Whitbread	21.1x	17.8%	UK£5.0b
TRN Trainline	32.8x	15.1%	UK£1.8b
PPH PPHE Hotel Group	22.5x	31.6%	UK£493.1m
CPG Compass Group	31.8x	11.8%	UK£44.5b
IHG InterContinental Hotels Group	30.1x	10.7%	UK£15.3b

Price-To-Earnings vs Peers: IHG is expensive based on its Price-To-Earnings Ratio (30.1x) compared to the peer average (27.1x).

Price to Earnings Ratio vs Industry

How does IHG's PE Ratio compare vs other companies in the GB Hospitality Industry?

1 Company	Price / Earnings	Estimated Growth	Market Cap
TAST Tasty	0.4x	-75.9%	US$2.74m

No more companies available in this PE range

1 Company		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: IHG is expensive based on its Price-To-Earnings Ratio (30.1x) compared to the UK Hospitality industry average (20.4x).

Price to Earnings Ratio vs Fair Ratio

What is IHG's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

IHG PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	30.1x
Fair PE Ratio	30.3x

Price-To-Earnings vs Fair Ratio: IHG is good value based on its Price-To-Earnings Ratio (30.1x) compared to the estimated Fair Price-To-Earnings Ratio (30.3x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst IHG forecast and predictions for the stock price in 12 month’s time.
Date	Share Price	Average 1Y Price Target	Dispersion	High	Low	1Y Actual price	Analysts
Current	UK£96.44	UK£84.51 -12.4%	15.5%	UK£109.58	UK£66.52	n/a	17
Nov ’25	UK£85.92	UK£78.13 -9.1%	12.6%	UK£94.15	UK£64.91	n/a	17
Oct ’25	UK£80.98	UK£74.61 -7.9%	12.1%	UK£92.98	UK£60.34	n/a	17
Sep ’25	UK£75.84	UK£73.87 -2.6%	10.6%	UK£87.03	UK£60.03	n/a	18
Aug ’25	UK£76.20	UK£76.02 -0.2%	11.6%	UK£90.51	UK£61.34	n/a	18
Jul ’25	UK£81.90	UK£76.31 -6.8%	11.1%	UK£92.01	UK£62.35	n/a	18
Jun ’25	UK£79.00	UK£75.61 -4.3%	11.9%	UK£94.57	UK£59.98	n/a	18
May ’25	UK£78.72	UK£76.05 -3.4%	11.7%	UK£89.36	UK£60.68	n/a	18
Apr ’25	UK£82.42	UK£75.54 -8.3%	13.0%	UK£90.68	UK£57.51	n/a	18
Mar ’25	UK£83.56	UK£73.30 -12.3%	12.1%	UK£87.27	UK£57.35	n/a	19
Feb ’25	UK£74.74	UK£61.96 -17.1%	12.0%	UK£78.06	UK£46.21	n/a	19
Jan ’25	UK£70.90	UK£58.89 -16.9%	9.7%	UK£71.68	UK£46.10	n/a	19
Dec ’24	UK£63.04	UK£59.30 -5.9%	9.6%	UK£72.94	UK£46.91	n/a	19
Nov ’24	UK£58.60	UK£61.01 +4.1%	10.0%	UK£75.02	UK£48.28	UK£85.92	19
Oct ’24	UK£60.74	UK£61.84 +1.8%	8.2%	UK£72.03	UK£50.03	UK£80.98	20
Sep ’24	UK£59.70	UK£59.64 -0.1%	7.7%	UK£65.70	UK£48.49	UK£75.84	19
Aug ’24	UK£57.70	UK£58.07 +0.6%	6.7%	UK£65.13	UK£50.07	UK£76.20	17
Jul ’24	UK£54.34	UK£59.47 +9.4%	6.9%	UK£66.10	UK£49.74	UK£81.90	17
Jun ’24	UK£53.38	UK£59.69 +11.8%	7.0%	UK£66.54	UK£50.35	UK£79.00	19
May ’24	UK£54.60	UK£58.29 +6.8%	6.9%	UK£65.02	UK£47.83	UK£78.72	19
Apr ’24	UK£53.12	UK£59.32 +11.7%	6.2%	UK£65.53	UK£48.98	UK£82.42	19
Mar ’24	UK£55.80	UK£59.90 +7.3%	7.6%	UK£67.34	UK£50.33	UK£83.56	19
Feb ’24	UK£56.10	UK£56.80 +1.3%	8.9%	UK£65.13	UK£48.13	UK£74.74	19
Jan ’24	UK£47.44	UK£54.09 +14.0%	10.3%	UK£65.72	UK£41.46	UK£70.90	19
Dec ’23	UK£48.20	UK£52.45 +8.8%	9.8%	UK£61.95	UK£41.57	UK£63.04	19
Nov ’23	UK£47.05	UK£55.12 +17.2%	9.6%	UK£65.05	UK£44.90	UK£58.60	19

Analyst Forecast: Target price is lower than the current share price.