Investors in the travel sector should see some reassurance from Intercontinental Hotels Group PLC (LSE:IHG) half-year numbers on 6 August, suggests Jeffries.
Second-quarter revenue per room (revpar) is forecast to rise by 3.4% with underlying earnings pushing towards a 10% improvement.
Further ahead, Jefferies sees IHG Improving and scaling its credit card proposition as the largest source of upside to consensus.
“Very simply, if IHG were to recognise 75% of its credit card fees in the P&L and grow fees in line with Marriott and Hilton at around 12% per year, this would imply [card underlying profits] EBIT moving from $33million in 2023 to $105 million by 2026.”
Overall, uncertainties surround the US and China, so Jefferies's stance is ‘hold’, though its price target is tweaked up slightly to US$84.
For the year to December 2024, Jefferies forecasts revenue of US$4.92 billion and underlying profit [EBIT] of US$1.09 billion.
Shares were flat at 8,304p.