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InterContinental Hotels: Balancing Growth Prospects with Cautious Valuation Amid Macroeconomic Uncertainties

InterContinental Hotels: Balancing Growth Prospects with Cautious Valuation Amid Macroeconomic Uncertainties

Analyst Jaina Mistry of Jefferies maintained a Hold rating on InterContinental Hotels, retaining the price target of £84.00.

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Jaina Mistry’s rating is based on a combination of factors that reflect both positive and cautious outlooks for InterContinental Hotels. Despite the company achieving an 8% beat on adjusted EPS and a 1% beat on EBIT pre-SF, the Q2 sales missed expectations by 1%. This mixed performance suggests a cautious approach, as the company maintains confidence in its FY25 profit consensus, with recurring cost savings expected to offset any incremental RevPAR challenges.
Furthermore, while InterContinental Hotels is recognized as a long-term growth entity with a strategy comparable to Marriott’s, its current valuation at 25.4 times the estimated 2025 earnings per share and a 5% discount to Marriott suggests a full valuation. This, coupled with ongoing uncertainties in the macroeconomic environment, particularly in the US RevPAR, leads to a Hold rating as the stock’s potential upside may be limited in the near term.

In another report released yesterday, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a p9,127.00 price target.

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