JPMorgan double upgrades InterContinental Hotels to 'overweight'
By Michele Maatouk
Date: Friday 26 Sep 2025
(Sharecast News) - InterContinental Hotels rallied on Friday after JPMorgan Cazenove double upgraded the stock to 'overweight' from 'underweight' and hiked the price target to 10,400 from 8,500p, saying it expects the narrative to turn more constructive.
JPM noted the shares have underperformed materially year to date, as a function of IHG's US exposure, FX, and a softer core underlying momentum in part triggered by a weaker revenue per available room (RevPAR) across key geographies of the US, China and UK.
Going forward, with RevPAR expectations now rebased, JPM said it expects the narrative to turn more constructive, gradually pivoting towards IHG's superior earnings visibility, high free cash flow conversion, allowing for circa 5% of shares repurchased annually, and execution.
"With IHG's pipeline at 34% of its existing footprint (high end of its typical 30-35% range) and sound progress in sight on the net unite growth front as a result, we would expect IHG's valuation premium to persist, in line with US peers (solid business structurally with sound earnings visibility and margin upside, scarcity of quality alternatives within Consumer)," it said.
In the same research note, JPM said it prefers IHG and Accor - also rated 'overweight' - to Premier Inn owner Whitbread, which it has a 'neutral' rating on.
"Accor's equity story is different but also appealing, offering material re-rating potential - above-average RevPAR momentum, improved execution and capital allocation framework, disposal of Essendi well on track," it said.
"We remain on the sidelines on WTB; as a domestic play, we would expect some consumer nervousness ahead of the UK Budget (Nov 26) to weigh on sentiment, with Germany's trading momentum separately not helpful."
At 1145 BST, IHG shares were 2.7% higher at 9,008p.
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