InterContinental Hotels Group PLC (IHG): A Bull Case Theory

We came across a bullish thesis on InterContinental Hotels Group PLC (IHG) on Substack by Lux Opes Research. In this article, we will summarize the bulls’ thesis on IHG. InterContinental Hotels Group PLC (IHG)’s share was trading at $120.56 as of March 6^th. IHG’s trailing and forward P/E were 31.29 and 24.10 respectively according to Yahoo Finance.

Intercontinental Hotels delivered a strong full-year 2024 performance, achieving 7% revenue growth, a 3% increase in RevPAR, and healthy net unit growth of 4.3%, demonstrating resilience despite broader market volatility. While the final dividend slightly missed expectations, the company compensated with a $900 million share buyback, bringing total shareholder returns for 2025 to over $1.1 billion. This underscores IHG’s commitment to capital returns, reinforcing investor confidence. Management remains optimistic about capitalizing on IHG’s global footprint, premium positioning, and long-term demand trends.

The recent acquisition of Ruby Hotels, a premium urban lifestyle brand, provides a new growth lever, particularly in Europe, where IHG sees untapped potential. This expansion aligns with the company’s medium-term EPS growth target of 12-15% annually, supported by a robust development pipeline of 325,000 rooms across key markets. IHG’s execution track record suggests continued upside potential as it strengthens its presence in high-growth regions.

IHG’s investment case remains compelling, anchored by its strong brand portfolio, diversified geographic exposure, and capital-efficient model. Its significant midscale segment presence enhances its resilience in varying economic conditions, while consistent buybacks boost shareholder returns. The company trades at a valuation discount to Hilton and Marriott, a gap that seems unwarranted given IHG’s consistent execution and strong cash flow generation. As the company continues to outperform expectations, this discount could close, presenting an attractive opportunity for investors seeking exposure to the global hospitality sector.

InterContinental Hotels Group PLC (IHG) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 13 hedge fund portfolios held IHG at the end of the third quarter which was 11 in the previous quarter. While we acknowledge the risk and potential of IHG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than IHG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.