InterContinental Hotels, the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Muneeba Kayani from Bank of America Securities maintained a Buy rating on the stock and has a p10,200.00 price target.
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Muneeba Kayani has given his Buy rating due to a combination of factors that highlight the potential for growth and innovation within InterContinental Hotels Group (IHG). The company’s business model shows significant room for monetization, particularly in non-Revenue per Available Room (RevPAR) fees. IHG’s current earnings from credit card licensing fees are substantially lower than its peers, suggesting potential for growth, especially with further brand development in the US upscale market. Additionally, the company anticipates substantial growth in branded residence fees, especially with the expansion in the Luxury & Lifestyle segment.
Furthermore, IHG’s investments in technology and loyalty programs are proving beneficial. The company’s comprehensive integration of its Guest Reservation System across all rooms enhances revenue management and contributes to its RevPAR premium. Despite having a smaller loyalty program compared to larger US competitors, IHG boasts a higher number of members per room, which is appealing to hotel owners. Looking ahead, the company remains optimistic about its net system growth outlook for 2026, driven by major events and brand expansion, particularly in the Americas and China.