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INTERCONTINENTAL HOTELS-ADR (IHG) Stock Fundamental Analysis

NYSE:IHG - New York Stock Exchange, Inc. - US45857P8068 - ADR

129.84  +3.02 (+2.38%)

After market: 129.84 0 (0%)

Fundamental Rating

5

IHG gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 134 industry peers in the Hotels, Restaurants & Leisure industry. IHG scores excellent on profitability, but there are some minor concerns on its financial health. IHG has a decent growth rate and is not valued too expensively.


Dividend Valuation Growth Profitability Health

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8

1. Profitability

1.1 Basic Checks

IHG had positive earnings in the past year.
In the past year IHG had a positive cash flow from operations.
IHG had positive earnings in 4 of the past 5 years.
In the past 5 years IHG always reported a positive cash flow from operatings.
IHG Yearly Net Income VS EBIT VS OCF VS FCFIHG Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 500M 1B

1.2 Ratios

Looking at the Return On Assets, with a value of 13.94%, IHG belongs to the top of the industry, outperforming 92.37% of the companies in the same industry.
IHG has a Return On Invested Capital of 29.09%. This is amongst the best in the industry. IHG outperforms 95.42% of its industry peers.
The Average Return On Invested Capital over the past 3 years for IHG is significantly above the industry average of 10.54%.
The 3 year average ROIC (19.76%) for IHG is below the current ROIC(29.09%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 13.94%
ROE N/A
ROIC 29.09%
ROA(3y)10.04%
ROA(5y)6.83%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)19.76%
ROIC(5y)16.29%
IHG Yearly ROA, ROE, ROICIHG Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 20 -20 -40

1.3 Margins

IHG has a Profit Margin of 13.52%. This is amongst the best in the industry. IHG outperforms 81.68% of its industry peers.
In the last couple of years the Profit Margin of IHG has grown nicely.
IHG has a Operating Margin of 21.02%. This is in the better half of the industry: IHG outperforms 79.39% of its industry peers.
IHG's Operating Margin has improved in the last couple of years.
IHG has a Gross Margin of 29.32%. This is in the lower half of the industry: IHG underperforms 78.63% of its industry peers.
IHG's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 21.02%
PM (TTM) 13.52%
GM 29.32%
OM growth 3Y68.41%
OM growth 5Y5.99%
PM growth 3YN/A
PM growth 5Y14.92%
GM growth 3Y13.51%
GM growth 5Y3.35%
IHG Yearly Profit, Operating, Gross MarginsIHG Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 20 40 60

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4

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so IHG is creating value.
IHG has less shares outstanding than it did 1 year ago.
IHG has less shares outstanding than it did 5 years ago.
IHG has a worse debt/assets ratio than last year.
IHG Yearly Shares OutstandingIHG Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 50M 100M 150M
IHG Yearly Total Debt VS Total AssetsIHG Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B 4B 5B

2.2 Solvency

IHG has an Altman-Z score of 2.76. This is not the best score and indicates that IHG is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of IHG (2.76) is better than 72.52% of its industry peers.
IHG has a debt to FCF ratio of 5.44. This is a neutral value as IHG would need 5.44 years to pay back of all of its debts.
The Debt to FCF ratio of IHG (5.44) is better than 71.76% of its industry peers.
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF 5.44
Altman-Z 2.76
ROIC/WACC3.56
WACC8.18%
IHG Yearly LT Debt VS Equity VS FCFIHG Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 1B -1B 2B 3B

2.3 Liquidity

A Current Ratio of 0.85 indicates that IHG may have some problems paying its short term obligations.
With a Current ratio value of 0.85, IHG perfoms like the industry average, outperforming 47.33% of the companies in the same industry.
A Quick Ratio of 0.85 indicates that IHG may have some problems paying its short term obligations.
IHG has a Quick ratio (0.85) which is comparable to the rest of the industry.
Industry RankSector Rank
Current Ratio 0.85
Quick Ratio 0.85
IHG Yearly Current Assets VS Current LiabilitesIHG Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B

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5

3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 15.99% over the past year.
The Earnings Per Share has been growing slightly by 5.41% on average over the past years.
The Revenue has grown by 9.16% in the past year. This is quite good.
Measured over the past years, IHG shows a small growth in Revenue. The Revenue has been growing by 1.29% on average per year.
EPS 1Y (TTM)15.99%
EPS 3Y128.96%
EPS 5Y5.41%
EPS Q2Q%11.48%
Revenue 1Y (TTM)9.16%
Revenue growth 3Y24.54%
Revenue growth 5Y1.29%
Sales Q2Q%7.47%

3.2 Future

Based on estimates for the next years, IHG will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.98% on average per year.
The Revenue is expected to grow by 7.59% on average over the next years.
EPS Next Y20.9%
EPS Next 2Y16.89%
EPS Next 3Y15.3%
EPS Next 5Y10.98%
Revenue Next Year7.51%
Revenue Next 2Y7.17%
Revenue Next 3Y6.73%
Revenue Next 5Y7.59%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
IHG Yearly Revenue VS EstimatesIHG Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 1B 2B 3B 4B
IHG Yearly EPS VS EstimatesIHG Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2 4 6 8

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4

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 31.29, which means the current valuation is very expensive for IHG.
The rest of the industry has a similar Price/Earnings ratio as IHG.
IHG is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 24.18, the valuation of IHG can be described as rather expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as IHG.
IHG is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 24.44, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 31.29
Fwd PE 24.18
IHG Price Earnings VS Forward Price EarningsIHG Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

IHG's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. IHG is more expensive than 68.70% of the companies in the same industry.
63.36% of the companies in the same industry are more expensive than IHG, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 31.16
EV/EBITDA 21.93
IHG Per share dataIHG EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 10 -10 20 -20

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of IHG may justify a higher PE ratio.
A more expensive valuation may be justified as IHG's earnings are expected to grow with 15.30% in the coming years.
PEG (NY)1.5
PEG (5Y)5.78
EPS Next 2Y16.89%
EPS Next 3Y15.3%

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5

5. Dividend

5.1 Amount

IHG has a Yearly Dividend Yield of 1.22%. Purely for dividend investing, there may be better candidates out there.
IHG's Dividend Yield is a higher than the industry average which is at 2.98.
With a Dividend Yield of 1.22, IHG pays less dividend than the S&P500 average, which is at 2.28.
Industry RankSector Rank
Dividend Yield 1.22%

5.2 History

The dividend of IHG has a limited annual growth rate of 5.49%.
IHG has been paying a dividend for at least 10 years, so it has a reliable track record.
IHG has decreased its dividend in the last 3 years.
Dividend Growth(5Y)5.49%
Div Incr Years2
Div Non Decr Years2
IHG Yearly Dividends per shareIHG Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2022 2023 2024 1 2 3

5.3 Sustainability

39.34% of the earnings are spent on dividend by IHG. This is a low number and sustainable payout ratio.
IHG's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP39.34%
EPS Next 2Y16.89%
EPS Next 3Y15.3%
IHG Yearly Income VS Free CF VS DividendIHG Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 500M 1B 1.5B
IHG Dividend Payout.IHG Dividend Payout, showing the Payout Ratio.IHG Dividend Payout.PayoutRetained Earnings

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INTERCONTINENTAL HOTELS-ADR

NYSE:IHG (1/21/2025, 8:07:10 PM)

After market: 129.84 0 (0%)

129.84

+3.02 (+2.38%)

Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)10-22 2024-10-22/bmo
Earnings (Next)02-18 2025-02-18/amc
Inst Owners72.16%
Inst Owner Change-0.09%
Ins Owners0.35%
Ins Owner ChangeN/A
Market Cap20.47B
Analysts51.67
Price Target114.57 (-11.76%)
Short Float %0.21%
Short Ratio2.76
Dividend
Industry RankSector Rank
Dividend Yield 1.22%
Yearly Dividend1.44
Dividend Growth(5Y)5.49%
DP39.34%
Div Incr Years2
Div Non Decr Years2
Ex-DateN/A
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0.03%
PT rev (3m)7.22%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0.32%
EPS NY rev (3m)-3.06%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.17%
Valuation
Industry RankSector Rank
PE 31.29
Fwd PE 24.18
P/S 4.34
P/FCF 31.16
P/OCF 27.66
P/B N/A
P/tB N/A
EV/EBITDA 21.93
EPS(TTM)4.15
EY3.2%
EPS(NY)5.37
Fwd EY4.13%
FCF(TTM)4.17
FCFY3.21%
OCF(TTM)4.69
OCFY3.62%
SpS29.94
BVpS-13.98
TBVpS-20.77
PEG (NY)1.5
PEG (5Y)5.78
Profitability
Industry RankSector Rank
ROA 13.94%
ROE N/A
ROCE 40.44%
ROIC 29.09%
ROICexc 44.74%
ROICexgc 135.94%
OM 21.02%
PM (TTM) 13.52%
GM 29.32%
FCFM 13.92%
ROA(3y)10.04%
ROA(5y)6.83%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)19.76%
ROIC(5y)16.29%
ROICexc(3y)36.1%
ROICexc(5y)26.67%
ROICexgc(3y)159.51%
ROICexgc(5y)105.98%
ROCE(3y)27.78%
ROCE(5y)23.16%
ROICexcg growth 3Y245.88%
ROICexcg growth 5Y2.76%
ROICexc growth 3Y153.58%
ROICexc growth 5Y11.93%
OM growth 3Y68.41%
OM growth 5Y5.99%
PM growth 3YN/A
PM growth 5Y14.92%
GM growth 3Y13.51%
GM growth 5Y3.35%
F-Score5
Asset Turnover1.03
Health
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF 5.44
Debt/EBITDA 2.79
Cap/Depr 127.69%
Cap/Sales 1.76%
Interest Coverage 6.94
Cash Conversion 70.01%
Profit Quality 102.98%
Current Ratio 0.85
Quick Ratio 0.85
Altman-Z 2.76
F-Score5
WACC8.18%
ROIC/WACC3.56
Cap/Depr(3y)107.01%
Cap/Depr(5y)94.1%
Cap/Sales(3y)2.04%
Cap/Sales(5y)2.63%
Profit Quality(3y)157.85%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)15.99%
EPS 3Y128.96%
EPS 5Y5.41%
EPS Q2Q%11.48%
EPS Next Y20.9%
EPS Next 2Y16.89%
EPS Next 3Y15.3%
EPS Next 5Y10.98%
Revenue 1Y (TTM)9.16%
Revenue growth 3Y24.54%
Revenue growth 5Y1.29%
Sales Q2Q%7.47%
Revenue Next Year7.51%
Revenue Next 2Y7.17%
Revenue Next 3Y6.73%
Revenue Next 5Y7.59%
EBIT growth 1Y9.25%
EBIT growth 3Y109.73%
EBIT growth 5Y7.36%
EBIT Next Year18.68%
EBIT Next 3Y11.55%
EBIT Next 5Y10.8%
FCF growth 1Y15.47%
FCF growth 3Y136.9%
FCF growth 5Y8.04%
OCF growth 1Y15.99%
OCF growth 3Y86.8%
OCF growth 5Y4.72%