Peel Hunt cuts IHG price target on weaker US travel data
Peel Hunt slashed its price target on on Wednesday to 9,500p from 10,670p, citing weaker US travel data.
The broker noted that IHG shares are down 17% year-to-date, while Marriott is down 2% and Hilton is up 8%.
"There is scope for IHG to catch up with peers," it said. "Despite lumpy US domestic travel data, we believe IHG can achieve 13% YoY operating profit growth in FY25E."
"In algorithm we trust", said Peel Hunt, noting that IHG only needs modest like-for-like growth to deliver its target 12-15% earnings per share compound annual growth rate and continue to return surplus capital.
"The S&P 500 and the share prices of IHG's competitors imply confidence in IHG's US prospects," it said.
"We believe that IHG's share price will catch up with the positive reality. We reiterate our 'add' recommendation, but lower our target price."
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.