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Is It Too Late To Consider Buying InterContinental Hotels Group PLC (LON:IHG)?

Today we're going to take a look at the well-established InterContinental Hotels Group PLC (LON:IHG). The company's stock saw a double-digit share price rise of over 10% in the past couple of months on the LSE. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at InterContinental Hotels Group’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for InterContinental Hotels Group

What's The Opportunity In InterContinental Hotels Group?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 0.30% above our intrinsic value, which means if you buy InterContinental Hotels Group today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth £77.71, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, InterContinental Hotels Group has a low beta, which suggests its share price is less volatile than the wider market.

What does the future of InterContinental Hotels Group look like?

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earnings-and-revenue-growth

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by a double-digit 14% over the next couple of years, the outlook is positive for InterContinental Hotels Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has already priced in IHG’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

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Are you a potential investor? If you’ve been keeping tabs on IHG, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. While conducting our analysis, we found that InterContinental Hotels Group has 2 warning signs and it would be unwise to ignore them.

If you are no longer interested in InterContinental Hotels Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.