Will investors check-in to InterContinental Hotels following Tuesday’s interim results?
The hospitality firm has been a bit all over the place in 2018. Starting at £47.19, the stock spiked to £49.79 in last January, only to plunge to a 5 month nadir of £41.66 by early April. The company managed to bounce away from these lows in the second half of that month, however, eventually climbing above £50 for the first time in its history in mid-June.
Since then the stock has continued to be inconsistent, if in a narrower range. It had fallen below £47 by the start of July, only to briefly graze £50 a fortnight later, before tumbling once again thanks to a note from Morgan Stanley (NYSE:MS) entitled ‘Time to check out?’ InterContinental Hotels Group PLC now sits at a current trading price of £47.58 (Spreadex, 06/08/2018).
Despite a fairly messy year so far, InterContinental’s first quarter figures back in May were pretty good. Global comparable revenue per available room rose 3.5%, higher than both the expected 2.5% and the 2.7% posted for the same period in 2017.
Region-by-region this broke down as a 2.9% rise in the Americas, with a 2.2% jump in the US; a 6% jump in Continental Europe (though RevPAR was down 1% in the UK, mainly due to tough comparatives in London); and, most importantly, an 11% surge in Greater China, fuelled by ‘strong transient, corporate and meetings demand’.
In terms of Tuesday’s half year figures, investors are going to want that healthy Q1 growth to have carried over into the second quarter. Analysts at UBS are forecasting RevPar for the first half could creep up to 3.6%, with group revenue rising 4.7% to $2.057 billion and underlying earnings jumping 4.6% to $411 million.
InterContinental Hotels Group PLC has a consensus rating of ‘Hold’ alongside an average target price of £45.73.
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