Bank of America says this hotel stock will be a winner because of the World Cup
The bank reiterated its buy rating on the hospitality stock.
TL;DR
- Bank of America sees InterContinental Hotels Group shares rising due to the World Cup and U.S. travel recovery.
- The bank reiterated its buy rating and raised its price target to $156 from $137, indicating an 11% upside.
- The World Cup could boost the company's revenue per available room (RevPAR) by 50 to 200 basis points next year.
- The U.S. market, a weak spot in 2025, is expected to see easier comparisons and a boost from events in 2Q/3Q.
- The Greater China market outlook is improving, with IHG's premium portfolio showing RevPAR growth over competitors.
- Net unit growth (NUG) is projected to accelerate to 4.8% in Q3 2025.
- IHG's brand power, loyalty program, and portfolio are strengthening, benefiting from the 'Hotels vs. OTA Gen-AI battle'.
- Long-term upside potential is seen in non-RevPAR fees, including credit card licensing and branded residence fees.
- The company's strong balance sheet and free cash flow support buybacks.
- InterContinental Hotels is up 13% year-to-date in 2025.