InterContinental Hotels Group: Strong Growth Potential and Undervalued Stock Reinforce Buy Rating

Bank of America Securities analyst Muneeba Kayani reiterated a Buy rating on InterContinental Hotels (IHG – Research Report) today and set a price target of p10,400.00.

Muneeba Kayani’s rating is based on InterContinental Hotels Group’s strong performance indicators and future growth potential. The company has shown a positive year-over-year growth in its revenue per available room (RevPAR), which exceeded market expectations in the first quarter. This growth is supported by an increase in average daily rates and occupancy, particularly in the EEMEA region, despite some challenges in Greater China.
Muneeba Kayani also highlights the company’s robust net system growth and a significant increase in signings, which contribute to a promising pipeline for future expansion. Additionally, the stock is trading at a discount compared to its US peers, which is seen as unjustified given the company’s high return on invested capital and potential for earnings growth and cash returns. These factors, along with ongoing share buybacks and potential cash returns to shareholders, reinforce the Buy rating for InterContinental Hotels Group.