Goldman Sachs upgraded InterContinental to Buy from Neutral with a price target of 9,350 GBp, up from 8,250 GBp. The company’s “enhanced” long-term earnings growth algorithm, improved enterprise platform, and optionality on ancillary revenue streams merits a narrower valuation discount to its key U.S. peers, the analyst tells investors in a research note. The firm says that with IHG shares having de-rated relative to U.S. peers in the last six months, the valuation gap has re-widened. This creates an entry point into a high-quality asset-light hotel franchising platform, contends Goldman.
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