Fact based stock research
InterContinental Hotels (LSE:IHG)

GB00BHJYC057

How to read the ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

InterContinental Hotels stock research in summary

ihgplc.com

ANALYSIS: With an Obermatt Combined Rank of 28 (worse than 72% compared with investment alternatives), InterContinental Hotels (Hotels, Resorts & Cruise Lines, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of InterContinental Hotels are low in value (priced high) with a consolidated Value Rank of 25 (worse than 75% of alternatives). But they show above-average growth (Growth Rank of 58) and are safely financed (Safety Rank of 50, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 28, is a hold recommendation based on InterContinental Hotels's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company InterContinental Hotels exhibits low value (Obermatt Value Rank of 25), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 58). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 50) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	25
Growth Rank	58
Safety Rank	50
Combined Rank	28

Country	United Kingdom
Industry	Hotels, Resorts & Cruise Lines
Index	FTSE All Shares, FTSE 100, FTSE 350, Employee Focus EU, Human Rights, Low Waste, Recycling
Size class	Large

This stock has achievements: Gold Winner CEO.

25-Apr-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: InterContinental Hotels

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	56	59	24	25
GROWTH
GROWTH	75	74	78	58
SAFETY
SAFETY	88	49	41	50
SENTIMENT
SENTIMENT	n/a	28	59	^new
360° VIEW
360° VIEW	n/a	55	46	^new

Most recent update of the stock research: 25-Apr-2024. Financial reporting date used for calculating ranks: 31-Dec-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better InterContinental Hotels is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	56	59	24	25
GROWTH
GROWTH	75	74	78	58
SAFETY
SAFETY	88	49	41	50
COMBINED
COMBINED	80	74	42	28

Last update of combined financial performance: 25-Apr-2024. Stock analysis on combined financial performance: The higher the rank of InterContinental Hotels the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 25 (worse than 75% compared with alternatives), InterContinental Hotels shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators where three out of four are below average for InterContinental Hotels. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 97, which means that the stock price is lower compared with invested capital than for 97% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 3 which means the stock price compared with what market professionals expect for future profits is higher than 97% of comparable companies, indicating a low value concerning InterContinental Hotels's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 97 and for the dividend yields rank which is lower than for 54% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 25, is a hold recommendation based on InterContinental Hotels's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for InterContinental Hotels, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	24	5	3	3
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	73	43	15	15
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	94	100	97	97
DIVIDEND YIELD
DIVIDEND YIELD	1	63	51	46
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	56	59	24	25

Last update of Value Rank: 25-Apr-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of InterContinental Hotels; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 58 (better than 58% compared with alternatives), InterContinental Hotels shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for InterContinental Hotels. Capital Growth has a rank of 50, which means that currently professionals expect the company to grow its invested capital more than 37% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 90 (above 90% of alternative investments). But Sales Growth has only a rank of 46, which means that, currently, professionals expect the company to grow less than 54% of its competitors, and Profit Growth is also low at a rank of 37. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 58, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for InterContinental Hotels, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	65	60	49	46
PROFIT GROWTH
PROFIT GROWTH	35	92	44	37
CAPITAL GROWTH
CAPITAL GROWTH	n/a	44	86	50
STOCK RETURNS
STOCK RETURNS	28	36	88	90
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	75	74	78	58

Last update of Growth Rank: 25-Apr-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of InterContinental Hotels.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 50 (better than 50% compared with alternatives), the company InterContinental Hotels has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of InterContinental Hotels is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for InterContinental Hotels. Refinancing is at 62, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 62% of its competitors. Liquidity is also good at 77, meaning the company generates more profit to service its debt than 77% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 1, which means the company has an above-average debt-to-equity ratio. It has more debt than 99% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 50 (better than 50% compared with alternatives), InterContinental Hotels has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and InterContinental Hotels could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with InterContinental Hotels and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	80	1	1	1
REFINANCING
REFINANCING	40	72	54	62
LIQUIDITY
LIQUIDITY	43	63	78	77
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	88	49	41	50

Last update of Safety Rank: 25-Apr-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of InterContinental Hotels and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	35	1	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	48	54	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	33	88	^new
MARKET PULSE
MARKET PULSE	n/a	55	68	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	28	59	^new

Last update of Sentiment Rank: 25-Apr-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for InterContinental Hotels.
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