On Thursday, BofA Securities adjusted its outlook on InterContinental Hotels Group (IHG:LN) (NYSE: LON:IHG), increasing the shares price target to GBP90.00 from the previous GBP82.00. The firm continues to recommend a Buy rating for the hotel company's stock. The upgrade reflects a positive view of the company's growth prospects, particularly in new construction markets.
The optimism for InterContinental Hotels Group's future is partly due to the company's performance in new unit growth (NUG) in the China and India markets. These regions are expected to contribute significantly to the company's expansion. On the other hand, the United States and Europe are anticipated to experience more modest growth because they are more developed markets.
InterContinental Hotels Group currently holds a 4% share of the global rooms market and has a significant 10% share of the industry's pipeline. This indicates the company's potential to gain market share from independent hotels and other platforms. The firm's strategic positioning is likely to enhance its competitive edge in the hospitality industry.
Despite the slower pace in Europe, the Middle East, Africa, and Asia, the new construction market is projected to pick up speed. The stabilization and recent decline in interest rates have been conducive to the increase in new build signings, not just for InterContinental Hotels Group but across the industry as well.
In 2023, InterContinental Hotels Group witnessed an uptick in new build signings, signaling a positive trend for the company's expansion plans. This growth in new construction activities could be a harbinger of further development and success for the hotel group in the near future.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.