Fact based stock research
InterContinental Hotels (LSE:IHG)

GB00BHJYC057

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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.

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InterContinental Hotels stock research in summary

ihgplc.com

ANALYSIS: With an Obermatt Combined Rank of 63 (better than 63% compared with investment alternatives), InterContinental Hotels (Hotels, Resorts & Cruise Lines, United Kingdom) shares have above-average financial characteristics compared with similar stocks. Shares of InterContinental Hotels are low in value (priced high) with a consolidated Value Rank of 37 (worse than 63% of alternatives), and are riskily financed (Safety Rank of 37, which means above-average debt burdens) but show above-average growth (Growth Rank of 87). ...read more

RECOMMENDATION: A Combined Rank of 63, is a buy recommendation based on InterContinental Hotels's financial characteristics. As the company InterContinental Hotels shows low value with an Obermatt Value Rank of 37 (63% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 87% of comparable companies (Obermatt Growth Rank is 87). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 37 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for InterContinental Hotels, even a low-value company (in terms of its key financial indicators) can be a good investment. 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	37
Growth Rank	87
Safety Rank	37
Combined Rank	63

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.

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

Further information

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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	37
GROWTH
GROWTH	75	74	78	87
SAFETY
SAFETY	88	49	41	37
SENTIMENT
SENTIMENT	n/a	28	59	^new
360° VIEW
360° VIEW	n/a	55	46	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. 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	37
GROWTH
GROWTH	75	74	78	87
SAFETY
SAFETY	88	49	41	37
COMBINED
COMBINED	80	74	42	63

Last update of combined financial performance: 14-Nov-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 37 (worse than 63% 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 93, which means that the stock price is lower compared with invested capital than for 93% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 9 which means the stock price compared with what market professionals expect for future profits is higher than 91% 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 93 and for the dividend yields rank which is lower than for 51% 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 37, 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	9
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	73	43	15	19
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	94	100	97	93
DIVIDEND YIELD
DIVIDEND YIELD	1	63	51	49
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	56	59	24	37

Last update of Value Rank: 14-Nov-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 87 (better than 87% compared with alternatives) for 2024, InterContinental Hotels shows one of the highest growth dynamics in its industry. Investors also speak of high 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 93, which means that currently professionals expect the company to grow its invested capital more than 40% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 87 (above 87% of alternative investments). But Sales Growth has only a rank of 48, which means that, currently, professionals expect the company to grow less than 52% of its competitors, and Profit Growth is also low at a rank of 40. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 87, 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	48
PROFIT GROWTH
PROFIT GROWTH	35	92	44	40
CAPITAL GROWTH
CAPITAL GROWTH	n/a	44	86	93
STOCK RETURNS
STOCK RETURNS	28	36	88	87
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	75	74	78	87

Last update of Growth Rank: 14-Nov-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 37 (better than 37% compared with alternatives), the company InterContinental Hotels has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of InterContinental Hotels is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for InterContinental Hotels. Liquidity is 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. But Refinancing is riskier at a rank of 39, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 61% of its competitors. Leverage is also high at a rank of 1, which means that 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 37 (worse than 63% compared with alternatives), InterContinental Hotels has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	80	1	1	1
REFINANCING
REFINANCING	40	72	54	39
LIQUIDITY
LIQUIDITY	43	63	78	77
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	88	49	41	37

Last update of Safety Rank: 14-Nov-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: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for InterContinental Hotels.
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