This is an updated version of the report published on April 16, 2026, at 09:27 AM GMT+1

InterContinental Hotels Group PLC

InterContinental Hotels Group PLC (LSE: IHG) is an FTSE 100 listed global hospitality company that incorporates broad range of unique brands, including 19 hotel brands and the IHG One Rewards loyalty program. With around 6,300 hotels operating in over 100 countries and a development pipeline exceeding 2,000 properties, the Company has a significant global presence.

Key Recommendation Rationale – Sell at USD 142.50

• Deceleration in Core US RevPAR and Weak Forward Outlook: IHG's Americas RevPAR deteriorated from +3.5% to -2.0% across 2025. Business bookings (+2%) failed to offset declines in Group (-1%) and Leisure (-2%). Limited US supply growth signals intensified competition for stagnant demand.
• Elevated Net Debt and Weakening Interest Coverage: Net debt rose 20% to USD3.3bn due to USD1.1bn shareholder returns. Interest expense jumped 21%, with coverage estimated to tighten from 6.3x to ~5.3x in 2026, reducing financial flexibility.
• Conversion of Adjusted Earnings to Free Cash Flow May Be Unsustainable: IHG achieved >100% cash conversion, aided by one-offs. Rising interest payments and working capital normalization could compress this metric, reducing surplus cash available for future shareholder returns.
• Margin Expansion Largely Driven by Non-Operational Ancillary Fees: Fee margin expanded 360bps, but ~130bps came from non-recurring ancillary fee step-ups (credit cards, loyalty). Excluding these, underlying leverage added ~230bps, making future margin expansion harder to repeat.

Valuation Methodology: Price/ Earnings Approach

 Share Price Chart  

Conclusion

IHG's US RevPAR turned negative, net debt rose 20%, and interest coverage is tightening. >100% cash conversion included one-offs. Margin expansion of 360bps included ~130bps from non-recurring ancillary fees, making future gains less certain.

For conducting the valuation, the following peers have been considered: Entain PLC (LSE: ENT), Compass Group PLC (LSE: CPG), etc

Given its current trading levels, the recent strategic investments and partnerships, relative valuation, and associated risks, it is prudent to exit the stock at the current levels.

Hence, a ‘Sell’ recommendation is given on the stock at the Current Market Price of USD 142.50 as of 16 April 2026 at 09:05 AM GMT +1.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is April 16, 2026. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’