Holiday Inn-owner Intercontinental Hotels Group PLC (LSE:IHG) shares have been on a rip since the FTSE 100-listed group’s interim earnings call in August and investors will be hoping for more of the same following upcoming third-quarter results.
As outlined at the half-year point, IHG expects a 12-15% compound annual growth rate (CAGR) in adjusted earnings per share (EPS) over the medium to long term.
The group plans to return over $1 billion to shareholders through dividends and share buybacks by the end of the year.
This includes $255 million in dividends and an $800 million share buyback program, of which $373 million has already been completed.
Key to hitting these targets will be a reversal of recent trends in the China market, where IHG witnessed a 7% decline in revenue per available room (RevPAR) in the second quarter.
Management attributed this to a significant amount of outbound travel from China to other markets, reducing domestic demand in the country.
IHG shares are currently up 20% year to date.
“Fundamentally, if you look mid-term to long term, we are still very confident in China,” IHG’s chief executive stated in August.
The market will decide for itself when third-quarter results drop on Tuesday, 22 October.