We recently published a list of 12 Most Oversold Large Cap Stocks to Invest in Now. In this article, we are going to take a look at where InterContinental Hotels Group PLC (NYSE:IHG) stands against other most oversold large cap stocks to invest in now.
Impact of Tariff Uncertainty on Wall Street and the Future of US Stocks
Wall Street is being impacted by the uncertainty surrounding the tariff news. The broader has dropped a lot since Trump took office on January 20, and investors are mostly worried about tariffs because they think they could hurt economic growth and cause inflation. Investors think trade policies can reduce consumer confidence and restrict businesses’ ability to invest capital, while Trump believes tariffs can boost national revenue, promote broad-based growth, and be used as a negotiation weapon with other nations.
According to Franklin Templeton, the Magnificent Seven’s supremacy in AI has allowed US stocks to generate significant returns over the last few years, with the broader market frequently hitting all-time highs. The outlook for the market as a whole is favorable, notwithstanding high valuations. Sales growth has been accelerating, innovation and investment are still happening at a rapid pace, and this year’s earnings are predicted to increase by double digits. Additionally, the administration of the US economy is more business-friendly. However, there are concerns, primarily associated with US trade policy and the anticipated effects of tariffs on important industries, such as technology.
Franklin Templeton thinks that despite these risks, investor confidence in US stocks should continue to be high. The new administration’s policy reforms are anticipated to finally produce long-term benefits for the larger US economy, notwithstanding the possibility of increased dangers.
Franklin Templeton also stated that although the Mag 7 stocks are positioned for long-term success, market leadership is anticipated to expand as and when innovation accelerates. According to the investment firm, active management is crucial. The transition from AI platforms to infrastructure is still in progress. Consequently, it is anticipated that the success of investments will depend on the ability to select the appropriate companies at the right time—those that have the technology, strategy, and flexibility to continue and sustain long-term growth.
Thanks to innovation and investment, US stocks—mostly large-cap stocks—have been doing well. Notably, the Dow index has increased by more than 4.5% in the last six months. The investment business sees expanding chances beyond such market leaders, even though the Mag 7 stocks still sustain the market momentum. The competitive landscape is still dynamic and has been generating new development sectors as a result of the ongoing AI-driven cycle.
Our Methodology
For our methodology, we screened for stocks with a market capitalization exceeding $10 billion and a relative strength index (RSI) below 40. We then ranked these stocks based on the lowest RSI as of March 23, 2025. An RSI below 40 suggests that the stock is oversold.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A modern hotel suite showing off the latest in hotel accommodations.
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.
Overall, IHG ranks 2nd on our list of most oversold large cap stocks to invest in now. While we acknowledge the potential of IHG, our conviction lies in the belief that 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.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
