Berenberg upgrades IHG to 'buy'
By Iain Gilbert
Date: Tuesday 26 Oct 2021
(Sharecast News) - Analysts at Berenberg upgraded Holiday Inn owner Intercontinental Hotels Group from 'hold' to 'buy' on Friday following a better-than-expected first-half performance.
Berenberg stated that IHG's strong first-half showing and the appearance of "supportive" recovery trends meant the company was now "well positioned" to beat current consensus expectations in 2021.
"The first half of 2021 saw IHG come in well ahead of consensus and beat our above-consensus expectations for underlying operating profit. While consensus has raised expectations for the full year, we believe that with recent recovery trends, particularly in the Americas and Greater China, IHG will deliver a better-than-expected full-year result," said the analysts.
The German bank also said its analysis concluded that concerns over IHG's future net unit growth were "misplaced" and highlighted that it believes the group can return to room growth of "at least 4%" moving forward.
"When we combine these factors with a valuation that looks compelling, we move our recommendation from 'hold' to 'buy' and increase our price target to 5,400.0p from 4,500.0p," said Berenberg.
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