InterContinental Hotels Group (GB:IHG) reported strong profits for Fiscal 2023 and launched a new share buyback plan worth $800 million. Importantly, the hotel chain’s annual revenue per available room (RevPAR) jumped 16.1% over Fiscal 2022 and surpassed the pre-pandemic levels by 10.9%. Following the news, IHG shares were up more than 4% at the time of writing.
Here’s More About IHG’s Results
InterContinental attributed its robust performance to the boom in the post-COVID travel demand. The company is targeting total shareholder returns (including buybacks and dividends) of more than $1 billion in Fiscal 2024. The FTSE 100-listed company announced a final dividend of 104 cents per share, up 10% from Fiscal 2022. The company intends to use its robust cash flows to fund higher dividends and stock buybacks.
In FY23, InterContinental’s total revenue rose 19% to $4.62 billion, thanks to significant recovery in the Americas, Europe, the Middle East, Africa, and Greater China regions. Moreover, the reported operating profit came in at $1.07 billion, up 70% from last year. Remarkably, IHG opened 275 hotels and signed 556 hotels into its pipeline in 2023.
IHG also reported strong growth in other metrics, including average daily rate and occupancy. Also, the fee margin improved to 59.3% in Fiscal 2023 from 55.9% last year. Looking ahead, IHG expects high-single-digit growth in its fee revenue, backed by cost efficiencies and scale.
What is the Stock Price Forecast for IHG?
Following the Fiscal 2023 print, Jefferies analyst Jaina Mistry reiterated a Buy rating on IHG stock with a price target of 6,400p (22% downside).
Overall, IHG stock has a Hold consensus rating on TipRanks, backed by two Buys, four Holds, and three Sell ratings. The InterContinental Hotels Group share price forecast of 6,506.22p implies 20.4% downside potential from current levels.
