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Intercontinental Hotels Group (IHG)
NYSE:IHG
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Intercontinental Hotels Group
(NYSE:IHG)
Rating:64Neutral
Price Target:
$123.00
â–²(10.08%Upside)
Intercontinental Hotels Group (IHG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$17.57B
Dividend Yield2.05%
Average Volume (3M)237.54K
Price to Earnings (P/E)28.7
Beta (1Y)0.99
Revenue Growth6.34%
EPS Growth-11.99%
CountryUS
Employees12,587
SectorConsumer Cyclical
Sector Strength58
IndustryTravel Lodging
Share Statistics
EPS (TTM)0.69
Shares Outstanding155,281,770
10 Day Avg. Volume270,173
30 Day Avg. Volume237,544
Financial Highlights & Ratios
PEG Ratio0.68
Price to Book (P/B)-6.54
Price to Sales (P/S)0.00
P/FCF Ratio19.30
Enterprise Value/Market Cap0.71
Enterprise Value/Revenue0.72
Enterprise Value/Gross Profit4.13
Enterprise Value/Ebitda2.78
Forecast
1Y Price Target
$111.46Price Target Upside-0.25% Downside
Rating ConsensusHold
Number of Analyst Covering1
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 Earnings Call Summary
Earnings Call Date:Feb 18, 2025
(Q4-2024)
| % Change Since: -15.46%|
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. 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
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 | ||||
| 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 | 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
Negative
111.74
Price Trends
111.90
Negative
117.22
Negative
116.27
Negative
Market Momentum
-0.02
Positive
39.78
Neutral
20.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IHG, the sentiment is Negative. The current price of 111.74 is below the 20-day moving average (MA) of 117.08, below the 50-day MA of 111.90, and below the 200-day MA of 116.27, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 39.78 is Neutral, neither overbought nor oversold. The STOCH value of 20.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IHG.
Intercontinental Hotels Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $59.56B | 38.47 | -41.19% | 0.25% | 7.43% | 38.52% | |
71 Outperform | $12.46B | 16.92 | 22.31% | 0.46% | -7.38% | 19.62% | |
70 Outperform | $10.51B | 23.90 | 28.90% | 4.68% | 5.20% | -11.08% | |
70 Outperform | $69.84B | 29.04 | -144.82% | 1.05% | 5.45% | -9.50% | |
67 Neutral | $6.09B | 18.81 | 53.31% | 2.07% | 4.79% | 48.48% | |
64 Neutral | $17.57B | 28.68 | -27.16% | 2.05% | 6.34% | -11.99% | |
62 Neutral | $6.82B | 11.05 | 2.80% | 4.32% | 2.67% | -24.92% |
* Consumer Cyclical Sector Average
Performance Comparison
IHG
Intercontinental Hotels Group
111.74
9.00
8.76%
HTHT
H World Group
33.30
0.53
1.62%
H
Hyatt Hotels
130.56
-18.78
-12.58%
MAR
Marriott International
254.99
12.70
5.24%
HLT
Hilton Worldwide Holdings
243.88
29.79
13.91%
WH
Wyndham Hotels & Resorts
79.13
8.37
11.83%
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.