InterContinental Hotels Group (IHG) has been downgraded to Hold from Buy by Berenberg, with a new price target of GBP 6,000, down from GBP 6,500.

While the analyst remains optimistic about the long-term growth prospects of the hotel industry and believes IHG is well-positioned to capitalize on these trends, they believe that this is already reflected in IHG’s current valuation.

Additionally, they foresee near-term headwinds arising from financing difficulties and geopolitical tensions, which could hinder any potential upward re-rating. As a result, Berenberg consider IHG to be fairly valued at present.

IHG shares have performed well this year, gaining almost 22%. Its recent Q3 results showcased the company’s strength this year, with revenue per available room growing 10.5% year-on-year and a particularly strong performance in China (revenue per available per room +43.2%.)

By Jamel Boughedda