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Intercontinental Hotels (IHG)
:IHG
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Intercontinental Hotels Group
(NYSE:IHG)
Select Model
Select Model
Rating:70Neutral
Price Target:
$147.00
▲(20.36% Upside)
Intercontinental Hotels Group demonstrates strong financial recovery and positive technical indicators, supported by a robust earnings call. However, high leverage and valuation concerns slightly temper the overall outlook. The company's strategic growth initiatives and optimistic future guidance contribute positively to its stock score.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial health.
System Growth
Robust system growth reflects successful expansion efforts and enhances competitive positioning in the hospitality industry.
Fee Margin Expansion
Fee margin expansion demonstrates improved profitability and operational efficiency, contributing to sustainable financial performance.
Negative Factors
High Leverage
High leverage can constrain financial flexibility and increase vulnerability to economic downturns, posing long-term risks.
Net Profit Margin Decline
Declining net profit margins may affect overall profitability, necessitating cost control measures to maintain financial stability.
Higher Hotel Closures
Increased hotel closures can hinder growth momentum and impact brand presence, challenging future expansion efforts.
Intercontinental Hotels Group (IHG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$19.80B
Dividend Yield1.31%
Average Volume (3M)155.19K
Price to Earnings (P/E)27.8
Beta (1Y)0.98
Revenue Growth8.89%
EPS Growth23.20%
CountryUS
Employees12,587
SectorConsumer Cyclical
Sector Strength84
IndustryTravel Lodging
Share Statistics
EPS (TTM)N/A
Shares Outstanding151,259,810
10 Day Avg. Volume132,292
30 Day Avg. Volume155,190
Financial Highlights & Ratios
PEG Ratio-2.77
Price to Book (P/B)-8.70
Price to Sales (P/S)4.09
P/FCF Ratio31.14
Enterprise Value/Market Cap1.10
Enterprise Value/Revenue4.22
Enterprise Value/Gross Profit7.05
Enterprise Value/Ebitda16.96
Forecast
1Y Price Target
$119.69Price Target Upside-2.00% Downside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)5.01
Revenue Forecast (FY)$5.21B
Intercontinental Hotels Group Business Overview & Revenue Model
Company DescriptionIntercontinental Hotels Group (IHG) is a global hospitality company headquartered in Denham, United Kingdom, that operates a broad portfolio of hotel brands across various market segments. With a presence in nearly 100 countries, IHG manages and franchises hotels under several well-known brands, including InterContinental, Crowne Plaza, Holiday Inn, and Kimpton Hotels. The company focuses on delivering exceptional guest experiences and providing value to both leisure and business travelers through its diverse offerings and loyalty programs.
How the Company Makes MoneyIHG generates revenue primarily through a combination of hotel management and franchise fees. The company operates two main revenue streams: management contracts and franchise agreements. Under management contracts, IHG manages hotels on behalf of owners, receiving a management fee based on the hotel's revenue and often an incentive fee tied to profitability. Franchise agreements allow independent hotel owners to operate under IHG's brand, whereby IHG earns a franchise fee based on a percentage of the hotel's revenue, as well as additional fees for marketing and support services. IHG also benefits from its IHG Rewards loyalty program, which encourages repeat business and drives customer retention, contributing to overall earnings. Significant partnerships with travel agencies, online booking platforms, and corporate clients further enhance IHG's revenue potential as they provide access to a broader customer base.
Intercontinental Hotels Group Key Performance Indicators (KPIs)
Any
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.
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.
Data provided by:
The Fly
The FlyIntercontinental Hotels Group Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Feb 24, 2026
Earnings Call Sentiment Positive
The earnings call reflects a strong overall performance with significant growth in RevPAR, system size, and financial metrics. However, there are challenges in the Americas and China, along with higher hotel closures, which tempered some of the positive aspects. Despite these issues, the company remains optimistic about future growth and has shown confidence with shareholder returns and strategic investments.Q2-2025 Updates
Positive Updates
RevPAR Growth
RevPAR grew by 1.8%, showcasing the company's geographic footprint and brand resiliency.
System Growth
Gross system growth was 7.7% and net system growth was 5.4%, driven by outstanding development activity and record openings.
Significant Room Signings
Signed over 51,000 rooms across 324 hotels, marking a 15% increase over 2024.
Fee Margin Expansion
Expanded fee margin by 390 basis points due to operating leverage and ancillary fee streams.
EBIT and EPS Growth
EBIT grew by 13% and adjusted EPS grew by 19%.
Share Buyback Program
Completed 47% of a $900 million share buyback program, returning over $1.1 billion to shareholders this year.
Record Development Progress in China
Achieved record signings and openings in Greater China despite market challenges.
Increase in Direct Digital Bookings
Reported a 2 percentage point increase in direct digital bookings.
Negative Updates
Americas Fee Revenue Decline
Americas fee revenues were down by about 1% despite RevPAR growth of approximately 1.5%.
Higher Hotel Closures
Experienced higher closures in the first half, affecting net system growth.
Challenges in China
RevPAR in China remains below potential, though there is optimism for future growth.
EMEAA RevPAR Slowdown
EMEAA RevPAR growth slowed to 3%, affected by the absence of major events seen in the previous year.
Company Guidance
In the IHG Half Year Results Call, CEO Elie Maalouf summarized the company's robust performance for the first half of 2025, highlighting several key metrics. The company's RevPAR increased by 1.8%, indicating strong geographic and brand resilience. Gross system growth reached 7.7%, with net system growth at 5.4%, driven by significant development activity and record hotel openings. IHG signed over 51,000 rooms across 324 hotels, marking a 15% rise from 2024, excluding mergers and acquisitions and large portfolio conversions. Fee margin expanded by 390 basis points, supported by operating leverage and ancillary fee streams. Earnings before interest and taxes (EBIT) grew by 13%, and adjusted earnings per share (EPS) rose by 19%. Additionally, IHG completed 47% of its $900 million share buyback program, expecting to return over $1.1 billion to shareholders this year through buybacks and dividends. The company remains optimistic about its strategic priorities and long-term growth outlook.Intercontinental Hotels Group Financial Statement Overview
Summary
Intercontinental Hotels Group demonstrates solid revenue recovery and strong cash flow generation post-pandemic. However, high leverage and negative equity pose significant financial risks, and net profit margins have slightly decreased.Income Statement
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.76
Positive
Balance Sheet
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.52
Neutral
Cash Flow
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.68
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.14B | 4.92B | 3.73B | 3.89B | 2.91B | 2.39B |
| Gross Profit | 3.08B | 1.46B | 1.94B | 1.09B | 893.00M | 536.00M |
| EBITDA | 1.28B | 1.25B | 1.27B | 815.00M | 692.00M | 31.00M |
| Net Income | 754.03M | 628.00M | 750.00M | 375.00M | 266.00M | -260.00M |
Balance Sheet | ||||||
| Total Assets | 4.94B | 4.75B | 4.81B | 4.22B | 4.72B | 5.04B |
| Cash, Cash Equivalents and Short-Term Investments | 619.00M | 1.01B | 1.33B | 976.00M | 1.45B | 1.63B |
| Total Debt | 4.10B | 3.69B | 3.59B | 2.82B | 3.26B | 4.22B |
| Total Liabilities | 7.58B | 7.06B | 6.76B | 5.82B | 6.19B | 6.89B |
| Stockholders Equity | -2.64B | -2.31B | -1.95B | -1.61B | -1.48B | -1.86B |
Cash Flow | ||||||
| Free Cash Flow | 850.59M | 646.00M | 811.00M | 547.00M | 584.00M | 61.00M |
| Operating Cash Flow | 876.68M | 724.00M | 893.00M | 646.00M | 636.00M | 137.00M |
| Investing Cash Flow | -189.26M | -99.00M | -137.00M | -78.00M | -12.00M | -61.00M |
| Financing Cash Flow | -948.28M | -894.00M | -417.00M | -961.00M | -860.00M | 1.35B |
Intercontinental Hotels Group Technical Analysis
Positive
122.13
Price Trends
126.63
Positive
123.17
Positive
118.25
Positive
Market Momentum
2.23
Positive
52.78
Neutral
25.13
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 122.13 is below the 20-day moving average (MA) of 131.58, below the 50-day MA of 126.63, and above the 200-day MA of 118.25, indicating a bullish trend. The MACD of 2.23 indicates Positive momentum. The RSI at 52.78 is Neutral, neither overbought nor oversold. The STOCH value of 25.13 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $14.20B | 26.99 | 32.61% | 3.71% | 6.66% | 10.67% | |
70 Neutral | $19.80B | 27.78 | ― | 1.31% | 8.89% | 23.20% | |
67 Neutral | $5.40B | 16.45 | 57.98% | 2.22% | 3.38% | 38.04% | |
63 Neutral | $62.72B | 39.10 | ― | 0.22% | 6.68% | 48.03% | |
62 Neutral | $78.52B | 30.90 | ― | 0.93% | 4.68% | -1.10% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
56 Neutral | $14.81B | ― | -2.45% | 0.39% | 2.61% | -106.74% |
* Consumer Cyclical Sector Average
IHG
Intercontinental Hotels Group
131.70
5.12
4.04%
HTHT
H World Group
47.48
15.20
47.09%
H
Hyatt Hotels
152.00
-8.73
-5.43%
MAR
Marriott International
283.84
-5.07
-1.75%
HLT
Hilton Worldwide Holdings
269.25
12.89
5.03%
WH
Wyndham Hotels & Resorts
72.37
-29.63
-29.05%
Intercontinental Hotels Group Corporate Events
InterContinental Hotels Group Executes Share Buyback and Reports Increased Stake by PineStone Asset Management
Aug 22, 2025
On August 8, 2025, InterContinental Hotels Group PLC executed a transaction to repurchase 2,296 of its ordinary shares on the London Stock Exchange, with the intention of canceling these shares. This move is part of a broader strategy to manage its share capital and enhance shareholder value. Additionally, PineStone Asset Management Inc. increased its voting rights in the company to 8.066993%, reflecting a significant stake in the company.
InterContinental Hotels Group Executes Share Buybacks in August 2025
Aug 8, 2025
InterContinental Hotels Group PLC announced a series of share buybacks from July 25 to August 7, 2025, purchasing its own shares on the London Stock Exchange through Merrill Lynch International. These transactions, authorized by shareholders in May 2025, are part of the company’s strategy to manage its capital structure and are intended to be canceled, impacting the total number of shares in circulation. This move reflects the company’s ongoing efforts to enhance shareholder value and optimize its financial operations.
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.