InterContinental Hotels (IHG) Shares Offer 40% Upside - Barron's
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Shares of InterContinental Hotels Group (NYSE: IHG), which are up sharply over the last year, should continue to shine as the economic recovery takes hold, according to a weekend Barron's article.
Earnings for the hotel operators are likely to jump 20% next year, and low debt and strong cash flow could bring a share buyback or raised dividend.
The company, which operates hotels brands including InterContinental, Holiday Inn and Crowne Plaza hotel brands, could see its shares rise to $30 per share within the next 18 months, according to Matthew Wiens, the chief equity analyst at Sandhill Investment Management in Buffalo.
Unlike Starwood Hotels & Resorts Worldwide (NYSE: HOT) and Marriott International (NYSE: MAR), which get 80% of their profits from business travelers and 20% from vacationers, InterContinental, relies more on vacationers. However, both of these stocks trade at premium valuations, of 38x and 28x 2011 EPS, versus 21x for InterContinental. With casual travelers coming back and a lack of hotel supply, InterContinental offers big upside.
Earnings for the hotel operators are likely to jump 20% next year, and low debt and strong cash flow could bring a share buyback or raised dividend.
The company, which operates hotels brands including InterContinental, Holiday Inn and Crowne Plaza hotel brands, could see its shares rise to $30 per share within the next 18 months, according to Matthew Wiens, the chief equity analyst at Sandhill Investment Management in Buffalo.
Unlike Starwood Hotels & Resorts Worldwide (NYSE: HOT) and Marriott International (NYSE: MAR), which get 80% of their profits from business travelers and 20% from vacationers, InterContinental, relies more on vacationers. However, both of these stocks trade at premium valuations, of 38x and 28x 2011 EPS, versus 21x for InterContinental. With casual travelers coming back and a lack of hotel supply, InterContinental offers big upside.
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