IHG Shares: Goldman Sachs Sees Valuation Gap Narrowing With Hilton and Marriott

Goldman Sachs raised its price target on InterContinental Hotels Group to $188 from $165 (NYSE: IHG) (LON: IHG), maintaining a Buy rating on the stock in a note on Wednesday.

The bank told investors that it sees accelerating net unit growth and improving operational momentum narrowing the valuation discount to US peers Hilton and Marriott.

Goldman analysts believe a sustained acceleration of IHG’s net unit growth that narrows the gap to its key US peers is among several catalysts for a further re-rating of the shares.

Goldman also pointed to improved underlying momentum on the signings rate, the size of the pipeline under construction, conversion mix, and lower removal rates relative to recent history.

Meanwhile, Bernstein raised its own target on IHG to $154 from $141 in May, though analyst Richard Clarke kept a Market Perform rating, noting the firm remains most positive on Hyatt and Marriott within the global hotels and leisure space.

Clarke flagged that first-quarter dynamics were shaped more by the trajectory of the US economy than by Middle East developments, pointing to a K-shaped consumer environment as a key consideration for the sector through 2026 and 2027.

IHG shares closed Wednesday’s session up 1.3% at 162.25 pence. The stock has gained 15.9% year-to-date and is up 41.8% over the past 12 months, reflecting a sustained re-rating that Goldman appears to believe has further room to run.