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InterContinental Hotels Group PLC (LON:IHG) saw significant share price movement during recent months on the LSE, rising to highs of UK£109 and falling to the lows of UK£85.18. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether InterContinental Hotels Group's current trading price of UK£85.74 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at InterContinental Hotels Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What Is InterContinental Hotels Group Worth?
According to our valuation model, InterContinental Hotels Group seems to be fairly priced at around 8.8% below our intrinsic value, which means if you buy InterContinental Hotels Group today, you’d be paying a fair price for it. And if you believe the company’s true value is £94.01, then there’s not much of an upside to gain from mispricing. Furthermore, InterContinental Hotels Group’s low beta implies that the stock is less volatile than the wider market.
View our latest analysis for InterContinental Hotels Group
What does the future of InterContinental Hotels Group look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 49% over the next couple of years, the future seems bright for InterContinental Hotels Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? IHG’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on IHG, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.