12 Most Oversold Large Cap Stocks to Invest in Now

2. InterContinental Hotels Group PLC (NYSE:IHG)

Relative Strength Index: 24.16

InterContinental Hotels Group PLC  (NYSE:IHG) is a British multinational hospitality company that operates, franchises, and manages hotels globally. Rather than owning hotels, the company generates revenue through franchising its well-known brands like InterContinental, Holiday Inn, and Crowne Plaza and by managing properties for third-party owners. The company earns fees for the use of its brands, reservation systems, and marketing programs and also benefits from its loyalty program, IHG One Rewards, which had 132 million members as of 2023.

InterContinental Hotels Group PLC  (NYSE:IHG)’s Q4 2024 earnings call highlighted strong growth, though the company slightly missed EPS expectations. It reported earnings of $2.27 per share, just under the expected $2.29. Despite this, the business remains optimistic, showcasing solid RevPAR growth, expanding its system, and increasing profitability.

The corporation’s revenue for the quarter reached $2.3 billion, with EBIT growing 10% to $1.124 billion. The fee business saw a 6% increase in revenue and a 9% rise in operating profit, while the fee margin grew by 190 basis points to 61.2%. Global RevPAR increased by 4.6% in Q4, and for the full year, RevPAR rose 3%, driven by both higher rates and occupancy. The Americas and EMEAA regions performed well, but Greater China saw a slight decline, expected to rebound.

InterContinental Hotels Group PLC  (NYSE:IHG) also expanded its footprint, adding 59,000 rooms and reaching nearly 1 million rooms across 6,600 hotels. This represents a 6.2% gross system growth and a 4.3% net system growth, marking the third consecutive year of acceleration. The company is also focusing on capital allocation, launching a $900 million share buyback program, acquiring the Ruby Urban Lifestyle brand for $116 million, and increasing its dividend by 10%.

Their cash flow remained strong with a 94% cash conversion rate, and the company expects to return to typical levels of 100% moving forward. A key driver of this growth was the recovery in travel demand, especially in groups and leisure. The Ruby Urban Lifestyle acquisition is expected to strengthen InterContinental Hotels Group PLC  (NYSE:IHG)’s premium segment and cater to the growing demand for experiential travel, further boosting future revenue and profitability.