Morgan Stanley has checked into Intercontinental Hotels Group PLC's (LON:IHG) shares, upgrading its rating as it sees “no smoking gun” for the FTSE 100 listed Holiday Inn and Crowne Plaza hotels operator.
The US bank’s analysts raised their stance for IHG to ‘underweight’ from ‘equal-weight’, upping their target price to 4,200p from 3,700p, with the shares currently changing hands at 4,422p each, ahead 0.4% or 16p on last night’s close.
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In a note to clients, they said: “We are encouraged by IHG's relatively high franchise fees and large pipeline, and while its RevPAR under-indexes, we see no ‘smoking gun’.”
The analysts added that with solid fourth quarter RevPAR, a special dividend looks likely with full year 2017, especially with IHG looking to be a potential beneficiary from US tax reforms.
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They concluded: “While we still see downside to the current share price, we think the next news will be encouraging so neutralise our Underweight rating.”