Analysts at Deutsche Bank raised their target price on Holiday Inn owner InterContinental Hotels Group from 5,610.0p to 5,700.0p on Thursday following the firm’s “robust” full-year results.
Deutsche Bank stated it remains confident in IHG’s growth and recovery prospects due to the fact the overhang of exits now seemed to be over, with the group targeting net system size growth of over 4% for 2022e and more than 5% for 2023. The analysts also noted that this was after factoring in roughly 1.5% of exits in the system.
“The current pipeline stands at circa 31% of the group portfolio, so there is good visibility on growth ahead,” said DB.
The German bank noted that with the US recovering to near pre-crisis levels in the fourth quarter and a continued recovery in Europe on the gradual relaxation of restrictions, accommodation demand should drive growth ahead and also said that margins should remain ahead of pre-Covid levels given structural cost savings of $75.0m and strong cash generation.
