Ahead of its full-year results next week, Intercontinental Hotels Group PLC (LSE:IHG) shares are trading 26% higher than when it last reported results in October.
The Holiday Inn owner will post its final numbers on Tuesday, 21 February, and the share price movement suggests expectations are high.
As well as all the right noises on recovery from Covid, analysts at Peel Hunt forecast another annual buyback programme (of US$500mln) and a 10% dividend increase.
Strong exposure to the US means the company is better equipped in navigating the recovering markets in comparison to its British competitors, Peel Hunt believes.
Peel Hunt rates the stock a “buy” while another buyer Jefferies says IHG is its “preferred play on the recovering travel sector.”
The hotelier bounced back from a difficult pandemic when all its hotels effectively closed, and its share price shed half its value in a month.
Jefferies argues the Denham-based business is better prepared to face rival Marriott as consumers continue to down trade, with over half of IHG rooms a cheaper alternative.
Investment bank UBS believe this year IHG will also benefit from recovery in China, with 5% growth in its pipeline delivery and revenue per available room (revpar) increasing by 7.4%.
However, the Swiss bank downgraded IHG to “neutral” this week, on the back of the share price rally, arguing the strong forecasted annual growth may already be priced in, though it upped the target price by 45p to £58.60.
IHG shares are trading at £56.16.