Intercontinental Hotels Group (IHG) AI Stock Analysis

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Intercontinental Hotels Group

(NYSE:IHG)

Rating:66Neutral

Price Target:

$124.00

▲(5.94%Upside)

Intercontinental Hotels Group demonstrates positive momentum with strong earnings and strategic growth initiatives, particularly highlighted in the recent earnings call. Financial risks due to leverage and valuation concerns are notable, but robust dividend yield and cash flow generation provide some stability.

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

Market Cap

$18.01B

Dividend Yield2.38%

Average Volume (3M)212.63K

Price to Earnings (P/E)30.4

Beta (1Y)0.97

Revenue Growth6.34%

EPS Growth-11.99%

CountryUS

Employees12,587

SectorConsumer Cyclical

Sector Strength71

IndustryTravel Lodging

Share Statistics

EPS (TTM)0.69

Shares Outstanding154,507,220

10 Day Avg. Volume178,125

30 Day Avg. Volume212,627

Financial Highlights & Ratios

PEG Ratio28.90

Price to Book (P/B)-8.13

Price to Sales (P/S)0.00

P/FCF Ratio27.84

Enterprise Value/Market Cap1.15

Enterprise Value/Revenue1.20

Enterprise Value/Gross Profit6.88

Enterprise Value/Ebitda4.64

Forecast

1Y Price Target

$123.00

Price Target Upside5.08% Upside

Rating ConsensusHold

Number of Analyst Covering0

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 makes money through a franchising and management fee model. The company operates a substantial portion of its hotels under franchise agreements, where hotel owners pay fees to use IHG's brand, reservation systems, and receive marketing support. Additionally, IHG manages hotels for third-party owners and earns management fees based on hotel revenues and profitability. The company also generates revenue through its loyalty program, IHG One Rewards, which encourages repeat business and customer retention. Significant partnerships with airlines, car rental companies, and other travel-related businesses further enhance its earning potential by driving customer engagement and cross-promotional opportunities.

Intercontinental Hotels Group Key Performance Indicators (KPIs)

Any

Revenue by Geography

Revenue by Geography
Breaks down revenue across different regions, highlighting where the company generates the most income and potential areas for growth or risk based on regional economic trends.

Chart InsightsIntercontinental Hotels Group is experiencing robust growth in the Americas and EMEAA regions, with both showing consistent revenue increases over recent years. The Americas lead in revenue, reflecting strong market demand and strategic positioning. Meanwhile, Greater China shows volatility, likely due to fluctuating economic conditions, but has recently stabilized. The Central region is steadily improving, indicating effective operational strategies. This geographic diversification provides a buffer against regional economic uncertainties, positioning IHG well for sustained growth despite potential challenges in specific markets.

Data provided by:

Main Street Data

Intercontinental Hotels Group Earnings Call Summary

Earnings Call Date:Feb 18, 2025

(Q4-2024)

% Change Since: -11.44%|

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.

Intercontinental Hotels Group Financial Statement Overview

Summary

Intercontinental Hotels Group shows a solid recovery trajectory in revenue and profitability post-pandemic. High leverage and negative equity pose financial risks, though 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.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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
EBITDA	1.25B	1.25B	815.00M	692.00M	31.00M
Net Income	628.00M	750.00M	375.00M	266.00M	-260.00M
Balance Sheet
Total Assets	4.75B	4.81B	4.22B	4.72B	5.04B
Cash, Cash Equivalents and Short-Term Investments	1.01B	1.33B	976.00M	1.45B	1.63B
Total Debt	3.69B	3.59B	2.82B	3.26B	4.22B
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 Price117.05

Price Trends

50DMA

117.38

Positive

100DMA

113.67

Positive

200DMA

117.99

Positive

Market Momentum

MACD

0.62

Positive

RSI

52.93

Neutral

STOCH

41.81

Neutral

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 117.05 is below the 20-day moving average (MA) of 117.98, below the 50-day MA of 117.38, and below the 200-day MA of 117.99, indicating a bullish trend. The MACD of 0.62 indicates Positive momentum. The RSI at 52.93 is Neutral, neither overbought nor oversold. The STOCH value of 41.81 is Neutral, 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 (67)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
H	75 Outperform	$14.07B	19.10	22.31%	0.51%	-7.38%	19.62%
HLT	73 Outperform	$63.43B	40.99	-41.19%	0.22%	6.26%	38.11%
MAR	72 Outperform	$74.91B	31.15	-144.82%	0.94%	5.45%	-9.50%
WH	69 Neutral	$6.63B	20.19	53.31%	1.78%	6.86%	38.50%
Sector *	67 Neutral	¥267.20B	13.40	6.45%	2.59%	5.22%	-11.90%
IHG	66 Neutral	$18.01B	30.37	-27.16%	2.38%	6.34%	-11.99%
HTHT	66 Neutral	$10.16B	24.23	28.90%	4.62%	5.20%	-11.08%

* Consumer Cyclical Sector Average

Performance Comparison

IHG

Intercontinental Hotels Group

117.05

15.94

15.77%

HTHT

H World Group

33.95

4.44

15.05%

Hyatt Hotels

145.50

-4.13

-2.76%

MAR

Marriott International

272.88

41.43

17.90%

HLT

Hilton Worldwide Holdings

267.57

54.91

25.82%

Wyndham Hotels & Resorts

88.82

13.60

18.08%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jun 25, 2025