It is time to stop selling InterContinental Hotels Group (LSE:IHG), according to stockbroker Peel Hunt, which today upgraded the FTSE 250 share to ‘hold’.
The broker eased its bearish view on the share following recent price weakness and last week’s corporate presentation to City analysts.
Peel Hunt analyst Ivor Jones lifted his forecasts for IHG as he moved from ‘reduce’ to ‘hold’, with a 4,600p price target versus a prevailing market price of 4,448p.
Jones in a note said management last week highlighted the group’s potential for future growth after reshuffling its portfolio.
“Early next year, after removing more underperforming hotels, we expect net system growth to return and for this to have a positive impact on sentiment,” the analyst said.
“Taking account of this, plus the forecast upgrade we have made today and recent share price weakness, leads us to upgrade to Hold.”
The analyst noted new forecasts that see earnings (EBITDA) rising 4% to US$564mln in the 2021 financial year and pre-tax profit rising 8% to US$316mln.