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InterContinental Hotels Group PLC ADR IHG

Morningstar Rating
$99.18 +1.22 (1.25%)
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Company Report

InterContinental's International Regions Seeing Healthy Demand in 2024

We think InterContinental holds one of the industry's strongest brand intangible assets—a source of its wide moat—and forecast it will expand its room share during the next decade. Renovated and newer brands focused on the attractive midscale and extended-stay segments as well as a loyalty program of 130 million members will aid this growth. Also, the company holds a strong presence in international markets, with non-Americas regions constituting 45% of total rooms in 2023. This positions the company well for the more than 1 billion middle-income class individuals expected to be added to the global population over the next decade. The company currently has a mid-single-digit percentage share of global hotel rooms and over 10% share of all industry rooms under construction. We see its total room growth averaging over 3% over the next decade, above the 1%-2% supply increase we estimate for the US industry.

Price vs Fair Value

IHG is trading at a 399% premium.
Price
$97.96
Fair Value
$16.00
Uncertainty
Medium
1-Star Price
$726.32
5-Star Price
$53.40
Economic Moat
Wqt
Capital Allocation
Cphsrztd

Bulls Say, Bears Say

Bulls

InterContinental's current mid-single-digit share of hotel industry rooms is set to increase as the company controls more than 10% of the rooms in the global hotel industry under-construction pipeline.

Bears

Independent hotels and vacation rentals present a competitive threat, and the advancement of technology and its use by next-generation travelers increases the access and awareness of these properties.

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News

Trading Information

Previous Close Price
$97.96
Day Range
$99.0999.72
52-Week Range
$65.71111.94
Bid/Ask
$99.14 / $99.23
Market Cap
$16.09 Bil
Volume/Avg
143,053 / 174,003

Key Statistics

Price/Earnings (Normalized)
24.45
Price/Sales
3.60
Dividend Yield (Trailing)
1.55%
Dividend Yield (Forward)
1.55%
Total Yield
6.52%

Company Profile

InterContinental Hotels Group operates 946,000 rooms across 19 brands addressing the midscale through luxury segments, as of Dec. 31, 2023. Holiday Inn and Holiday Inn Express constitute the largest brand, while Hotel Indigo, Even, Hualuxe, Kimpton, and Voco are newer lifestyle brands experiencing strong demand. The company launched a midscale brand, Avid, in 2017 and closed on a 51% stake in Regent Hotels in 2018. It acquired Six Senses in 2019 and launched another midscale brand, Garner, in 2023. Managed and franchised represent 99% of total rooms. As of Dec. 31, 2023, the Americas represented 55% of total rooms, with Greater China accounting for 19% and Europe, Asia, the Middle East, and Africa making up 26%.
Sector
Consumer Cyclical
Industry
Lodging
Stock Style Box
Large Growth
Total Number of Employees
13,462

Competitors

Valuation

Metric
IHG
CHH
H
Price/Earnings (Normalized)
24.4519.4062.53
Price/Book Value
845.604.00
Price/Sales
3.603.752.31
Price/Cash Flow
20.4622.2928.04
Price/Earnings
IHG
CHH
H

Financial Strength

Metric
IHG
CHH
H
Quick Ratio
0.900.320.50
Current Ratio
0.970.370.59
Interest Coverage
9.445.325.29
Quick Ratio
IHG
CHH
H

Profitability

Metric
IHG
CHH
H
Return on Assets (Normalized)
14.45%13.96%6.69%
Return on Equity (Normalized)
732.38%22.84%
Return on Invested Capital (Normalized)
52.08%22.46%12.43%
Return on Assets
IHG
CHH
H
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Lodging Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
MAR
Marriott International Inc Class AYxrlxmfbmBbrb$66.9 Bil
HLT
Hilton Worldwide Holdings IncHdrxddzJvjxx$49.1 Bil
ICHGF
InterContinental Hotels Group PLCWrrg$16.3 Bil
H
Hyatt Hotels Corp Class AJbsjvbcPwshks$14.6 Bil
HTHT
H World Group Ltd ADRZqlhlbd$11.8 Bil
ACCYY
Accor SA ADRGzxmnbg$10.7 Bil
ACRFF
Accor SANvxslc$10.5 Bil
WH
Wyndham Hotels & Resorts Inc Ordinary SharesFgvbnllkMqtffh$5.5 Bil
CHH
Choice Hotels International IncSgrfglzxRbbzfnw$5.3 Bil

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