InterContinental Hotels (IHG – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Jamie Rollo from Morgan Stanley maintained a Sell rating on the stock and has a p9,600.00 price target.
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Jamie Rollo has given his Sell rating due to a combination of factors impacting InterContinental Hotels. Despite the company’s FY24 financial results aligning with market expectations, certain aspects like the slightly underwhelming free cash flow and share buyback figures have raised concerns. The company’s $900 million share buyback fell short of the market’s anticipation of $1 billion, and the free cash flow experienced a 22% decline attributed to increased capital expenditure and system fund requirements.
Moreover, while the RevPAR growth and EBIT margins showed modest improvements, the lack of guidance and the small acquisition of the Ruby hotels brand have not been enough to bolster confidence in the stock’s performance. The market reaction is expected to be neutral, indicating that while the company is performing adequately, it may not be enough to justify a Buy or Hold rating at this time.