Intercontinental Hotels Group (IHG) AI Stock Analysis

336 Followers

Top Page

Intercontinental Hotels Group

(NYSE:IHG)

66Neutral

Intercontinental Hotels Group exhibits a solid recovery in financial performance with strong revenue growth and cash flow generation. However, high leverage poses financial risks. Technical indicators suggest positive short-term momentum but caution due to potential resistance and overbought conditions. The valuation seems high, which might limit growth potential. The positive earnings call reflects strong operational performance and shareholder returns, although regional challenges and increased expenditures present risks.

Intercontinental Hotels Group (IHG) vs. S&P 500 (SPY)

Market Cap

$18.56B

Dividend Yield1.36%

Average Volume (3M)295.40K

Price to Earnings (P/E)31.0

Beta (1Y)0.99

Revenue Growth6.34%

EPS Growth-11.99%

CountryUS

Employees12,587

SectorConsumer Cyclical

Sector Strength67

IndustryTravel Lodging

Share Statistics

EPS (TTM)0.69

Shares Outstanding155,564,850

10 Day Avg. Volume208,859

30 Day Avg. Volume295,404

Financial Highlights & Ratios

PEG Ratio106.78

Price to Book (P/B)-7.51

Price to Sales (P/S)0.00

P/FCF Ratio24.62

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$111.46

Price Target Upside-9.93% Downside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Intercontinental Hotels Group Business Overview & Revenue Model

Company DescriptionInterContinental Hotels Group PLC owns, manages, franchises, and leases hotels in the Americas, Europe, Asia, the Middle East, Africa, and Greater China. The company operates hotels under the Six Senses, Regent, InterContinental Hotels & Resorts, Vignette Collection, Kimpton Hotels & Restaurants, Hotel Indigo, EVEN Hotels, HUALUXE, Holiday Inn, Holiday Inn Express, Holiday Inn Club Vacations, avid, Staybridge Suites, Atwell Suites, Candlewood Suites, voco, and Crowne Plaza. It also provides IHG Rewards loyalty program. As of December 31, 2021, the company operated 5,991 hotels and 880,327 rooms in approximately 100 countries. InterContinental Hotels Group PLC was founded in 1777 and is headquartered in Denham, the United Kingdom.

How the Company Makes MoneyIHG primarily generates revenue through its franchising and management contracts. The company earns fees from hotel owners for licensing its brands and providing management services, which include operational support, marketing, and reservations systems. Additionally, IHG benefits from royalty fees based on a percentage of hotel revenues. A smaller portion of revenue comes from owned and leased hotels, where IHG directly operates the properties. Strategic partnerships and loyalty programs such as IHG Rewards Club also play a significant role in driving customer engagement and repeat business, contributing to the company's financial performance.

Intercontinental Hotels Group Financial Statement Overview

Summary

Intercontinental Hotels Group shows a solid recovery trajectory in revenue and profitability post-pandemic. However, high leverage and negative equity pose financial risks. Cash flow generation is strong, providing a buffer against financial instability. The company needs to focus on improving net margins and reducing leverage to ensure long-term financial health.

Income Statement

Positive

Intercontinental Hotels Group has shown consistent revenue growth, recovering from the pandemic impact. The gross profit margin and EBIT margins remain strong, indicating effective cost management. However, net profit margins have decreased slightly due to rising expenses, which is a point of concern.

Balance Sheet

Neutral

The balance sheet reflects a negative stockholders' equity, indicating high leverage and potential financial risk. The debt-to-equity ratio is significantly high, which may limit financial flexibility. However, the company has managed to maintain a stable asset base.

Cash Flow

Positive

Operating cash flow remains robust, supporting sufficient free cash flow generation. Despite a decrease in free cash flow growth, the company maintains a good operating cash flow to net income ratio, suggesting efficient cash conversion.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
4.92B	3.73B	3.89B	2.91B	2.39B
	Gross Profit
1.46B	1.94B	1.09B	893.00M	536.00M
	EBIT
1.04B	1.07B	628.00M	494.00M	165.00M
	EBITDA
1.25B	1.25B	815.00M	692.00M	31.00M
	Net Income Common Stockholders
628.00M	750.00M	375.00M	266.00M	-260.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.01B	1.33B	976.00M	1.45B	1.63B
	Total Assets
4.75B	4.81B	4.22B	4.72B	5.04B
	Total Debt
3.69B	3.59B	2.82B	3.26B	4.22B
	Net Debt
2.68B	2.33B	1.85B	1.81B	2.59B
	Total Liabilities
7.06B	6.76B	5.82B	6.19B	6.89B
	Stockholders Equity
-2.31B	-1.95B	-1.61B	-1.48B	-1.86B
Cash Flow		Free Cash Flow
646.00M	811.00M	547.00M	584.00M	61.00M
	Operating Cash Flow
724.00M	893.00M	646.00M	636.00M	137.00M
	Investing Cash Flow
-99.00M	-137.00M	-78.00M	-12.00M	-61.00M
	Financing Cash Flow
-894.00M	-417.00M	-961.00M	-860.00M	1.35B

Intercontinental Hotels Group Technical Analysis

Technical Analysis Sentiment

Positive

Last Price123.75

Price Trends

50DMA

109.84

Positive

100DMA

118.54

Positive

200DMA

113.84

Positive

Market Momentum

MACD

3.27

Negative

RSI

74.92

Negative

STOCH

94.58

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IHG, the sentiment is Positive. The current price of 123.75 is above the 20-day moving average (MA) of 109.61, above the 50-day MA of 109.84, and above the 200-day MA of 113.84, indicating a bullish trend. The MACD of 3.27 indicates Negative momentum. The RSI at 74.92 is Negative, neither overbought nor oversold. The STOCH value of 94.58 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IHG.

Intercontinental Hotels Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HLT	73 Outperform	$60.00B	39.82	-41.19%	0.24%	7.43%	38.52%
H	72 Outperform	$12.88B	17.49	22.31%	0.44%	-7.38%	19.62%
HTHT	70 Outperform	$11.58B	29.38	25.06%	4.11%	7.68%	-25.12%
MAR	69 Neutral	$74.49B	30.98	-144.82%	0.93%	5.45%	-9.50%
IHG	66 Neutral	$18.56B	31.02	-27.16%	1.36%	6.34%	-11.99%
WH	65 Neutral	$6.68B	20.63	53.31%	1.78%	4.79%	48.48%
Sector *	61 Neutral	$6.93B	11.84	2.89%	3.91%	2.59%	-21.68%

* Consumer Cyclical Sector Average

Performance Comparison

IHG

Intercontinental Hotels Group

123.75

25.84

26.39%

HTHT

H World Group

37.92

-1.26

-3.22%

Hyatt Hotels

136.50

-13.36

-8.91%

MAR

Marriott International

274.14

40.62

17.39%

HLT

Hilton Worldwide Holdings

256.01

51.24

25.02%

Wyndham Hotels & Resorts

87.79

18.26

26.26%

Intercontinental Hotels Group Earnings Call Summary

Earnings Call Date:Feb 18, 2025

(Q4-2024)

% Change Since: -6.37%|

Next Earnings Date:Aug 07, 2025

Earnings Call Sentiment Positive

IHG delivered strong financial performance with significant revenue and EPS growth, record room growth, and increased shareholder returns. The acquisition of the Ruby brand and strong performance in priority geographies further highlight the company's positive momentum. However, challenges in Greater China and increased expenditure on key money were noted as potential concerns.

Q4-2024 Updates

Positive Updates

Strong Financial Performance

RevPAR grew by 3% for the year, driven by rate and occupancy gains, with a strong finish in Q4.

Record Room Growth and Pipeline

IHG added 59,000 rooms to its system, with gross system growth of 6.2% and net system growth of 4.3%. The company signed 106,000 rooms across 714 hotels, which is 34% ahead of 2023 levels.

Increase in Operating Profit and EPS

Fee margin grew 190 basis points, contributing to a 10% increase in operating profit from reportable segments. Adjusted EPS grew 15%.

Shareholder Returns

Completed an $800 million share buyback program and announced a new $900 million share buyback for 2025, expecting to return over $1.1 billion to shareholders.

Acquisition of Ruby Brand

Acquired the Ruby Urban Lifestyle brand for $116 million, extending the portfolio into the premium urban lifestyle segment.

Performance in Priority Growth Geographies

Record hotel signings and openings in Greater China and strong development momentum in the U.S.

Negative Updates

Challenges in Greater China

RevPAR was down 4.8% for the year, with a particularly tough Q3 where RevPAR was down 10.3% due to difficult year-on-year comparatives.

Increased Key Money Expenditure

Key money doubled in the year to $206 million, driven by increased development activity, particularly in the Premium and Luxury & Lifestyle segments.

Company Guidance

In the recent call, IHG Hotels & Resorts provided comprehensive guidance for their 2024 full-year performance, unveiling a robust financial outlook. The company reported a 3% increase in RevPAR, fueled by improvements in rate and occupancy, and noted strong performance across various segments, including leisure and business. System growth appeared promising, with 59,000 rooms added, leading to a gross system growth of 6.2% and a net system growth of 4.3%. IHG signed 106,000 rooms across 714 hotels, marking a 34% increase over the previous year. Financial metrics also showed strength, with a 10% rise in operating profit from reportable segments and a 15% growth in adjusted EPS, supported by their $800 million share buyback program. Looking ahead, IHG launched a new $900 million share buyback initiative, anticipated to return over $1.1 billion to shareholders in 2025. Additionally, the acquisition of the Ruby Urban Lifestyle brand for $116 million was announced, expanding their portfolio into the premium urban lifestyle segment. The company also indicated a fee margin growth of 190 basis points and projected further improvements in fee margin due to new co-brand credit card agreements and loyalty point sales.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.