InterContinental Hotels Shares (IHG) Upgraded to ‘Buy’, Turn Green on Year

InterContinental Hotels Group (LON: IHG) is experiencing positive market sentiment, with shares trading higher today following an upgrade from Jefferies. The analyst's revised outlook reflects growing confidence in the hotel sector's resilience and IHG's strategic positioning within it.

IHG shares are currently trading 2.39% higher, buoyed by Jefferies analyst Jaina Mistry's upgrade to ‘Buy' from ‘Hold' and a price target of 11,400 GBp. This upward revision signals a positive shift in market perception, influenced by structural changes within the travel industry and IHG's ability to capitalize on them.

The upgrade is rooted in the assessment that the hotel sector offers an attractive investment opportunity amidst broader consumer industry growth limitations. Jefferies emphasizes that the post-pandemic travel recovery is not a temporary phenomenon but is driven by fundamental shifts in consumer spending patterns, government infrastructure investments, and the expansion of the global middle class.

This is further supported by the idea that RevPAR is no longer the primary driver for growth.

Analysts Rallying Behind IHG

This positive momentum for IHG follows a series of upgrades on Wall St. with Morgan Stanley upgrading to ‘Equal-Weight' on October 1, increasing the price target to 9,000 GBp, citing the company's resilient profitability, driven by ancillary income streams and improved valuation levels. Morgan Stanley analysts pointed to IHG's operating model, which relies more on franchising fees and less on management contracts.

Prior to Morgan Stanley, J.P. Morgan issued a double upgrade on September 26, moving IHG to ‘Overweight' with a price target of 10,400 GBp, justified by IHG's superior earnings visibility even amidst uncertain revenue per available room (RevPAR) trends. J.P. Morgan highlighted IHG's resilience across various markets, anticipating a more constructive narrative due to rebased RevPAR expectations.

However, not all analysts share the same level of optimism. Bernstein maintained a ‘Hold' rating on IHG in July, with a price target of 8,990 GBp, signaling a more cautious outlook. Similarly, Citi adjusted its price target slightly upward to 7,800 GBp in May but maintained a ‘Sell' rating, indicating continued reservations about the stock's performance.

IHG shares have just moved green YTD, with momentum picking up of late after a bumpy start to 2025. Wall Street is growing more bullish, the share price has moved 38% off April lows, yet on a YTD basis IHG trades only 2.5% higher. Next year could well be stronger for bulls if the latest upgrades are close to the mark.