Is There Now An Opportunity In InterContinental Hotels Group PLC (LON:IHG)?
Today we're going to take a look at the well-established InterContinental Hotels Group PLC (LON:IHG). The company's stock saw significant share price movement during recent months on the LSE, rising to highs of UK£57.08 and falling to the lows of UK£51.12. 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£53.84 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.
View our latest analysis for InterContinental Hotels Group
What's The Opportunity In InterContinental Hotels Group?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 6.04% above my intrinsic value, which means if you buy InterContinental Hotels Group today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is £50.77, there’s only an insignificant downside when the price falls to its real value. In addition to this, InterContinental Hotels Group has a low beta, which suggests its share price is less volatile than the wider market.
Can we expect growth from InterContinental Hotels Group?
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. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 98% 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? It seems like the market has already priced in IHG’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true 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 diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Every company has risks, and we've spotted 4 warning signs for InterContinental Hotels Group you should know about.
If you are no longer interested in InterContinental Hotels Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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