Deutsche Bank downgraded InterContinental Hotels (LON: IHG) to Hold from Buy on Wednesday, citing the company’s recovery as now being priced into the shares.

IHG’s London-listed shares have gained over 16% in the last three months following a rally in global equity markets. With the stock recently reaching record highs and trading above pre-pandemic levels, investors and analysts are showing some skepticism about how high it can potentially rise.

Deutsche bank cites valuation as the reason for the downgrade, although the firm raised its price target on the stock to 5,850p from 5,730p per share.

IHG is also set to return $1.7 billion to shareholders in buybacks and dividends since 2022, according to the research note.

The group reported its full-year results on Tuesday, which saw total revenue jump 34% to $3.9bn and operating profit rise 27% to $628 million.

Despite the current uncertain economic environment, IHG’s chief executive anticipates strong leisure demand, a further return of business and group travel, and the ongoing reopening of China this year.

By Jamel Boughedda