Jaina Mistry, an analyst from Jefferies, maintained the Hold rating on InterContinental Hotels (IHG – Research Report). The associated price target was lowered to £93.00.
Jaina Mistry’s rating is based on a combination of factors influencing InterContinental Hotels’ current market position and future prospects. The company is experiencing a push and pull between its investment in key money and its growth trajectory. While there is an acceleration in key luxury flagship openings and a shift towards premium, luxury, and lifestyle conversions, this trend is seen as cyclical and expected to positively impact EBIT and ROIC in the coming years.
Despite the promising outlook with an anticipated 17% EPS growth over the next two years and a 40% ROIC, InterContinental Hotels’ stock is trading at a 12% discount compared to Marriott. This valuation discrepancy, coupled with the cyclical nature of its current growth strategy, has led Jaina Mistry to adopt a Hold rating, suggesting that while the stock has potential, it may not outperform in the immediate term.
According to TipRanks, Mistry is a 3-star analyst with an average return of 3.5% and a 48.39% success rate.
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