Berenberg lowers target price on IHG

(Sharecast News) - Analysts at Berenberg lowered their target price on Holiday Inn owner Intercontinental Hotels Group from 9,700.0p to 9,200.0p on Wednesday but said the company's fundamentals remain "solid" despite a softer outlook. Berenberg noted that IHG's shares have fallen 15% year-to-date, principally due to concerns regarding hotel markets in the US and China - the two most important markets for IHG.

However, Berenberg said IHG's Q1 results "showed resilience", while the company's commentary on current trading and the confirmation that it remains "on track to meet consensus expectations" was seen as "encouraging".

"Although we are reducing our estimates - primarily due to our falling revenue per available room (RevPAR) estimate for the Americas division - the resilience of the business model can be seen with our estimates only falling by a low-single-digit amount," said Berenberg, which reiterated its 'hold' rating on the stock.

"We value IHG using a DCF model, which yields a value per share of 9,200p. On multiples, IHG trades on a P/E of 23.3x our FY25 EPS estimates."



Reporting by Iain Gilbert at Sharecast.com