Deutsche Bank downgrades InterContinental Hotels after results

Deutsche Bank downgraded InterContinental Hotels to ‘hold’ from ‘buy’ on Wednesday and cut the price target to 5,380p from 5,600p following the company’s full-year results a day earlier.

"In our view, the business remains robust, and poised for outperforming the broader accommodation market through its exposure to midscale segment, to high growth geographies (North America and China) and through domestic demand," the bank said.

"However, much of this seems in the price now, with the stock having run up circa 12-13% year-to-date (versus Stoxx Euro 600 up circa 3%) and register +75% since our upgrade in April 2nd 2020."

Deutsche said that on its revised forecasts, IHG trades at about 24x price-to-earnings FY'23e, versus approximately 22-23x mid-cycle multiples on a one-year forward basis.

"We believe the risk-reward is on balance, and rate the stock a hold," it said.