Shares in InterContinental Hotels slipped 2% today as analysts at JPMorgan Cazenove (JPM) downgraded its rating on the company to neutral from overweight.
"We reassess our convictions within EU hotels, taking a more cautious view on the sector following very supportive post-Covid leisure trends, with Whitbread our only remaining overweight now," it said.
"Whilst our estimates remain ahead of consensus across the board, based on continued strong momentum, there is clear uncertainty around the direction of revenue per available room going into the winter and growing concerns around the consumer" the broker commented.
JPM cut IHG to neutral from overweight and lowered its price target to 5,900p from 6,100p as it argued there is limited upside left.
"We struggle to see upside to current multiples, with most of the reopening related good news behind us and concerns about the sustainability of pricing.”
They also highlighted the deteriorating macro economic conditions and the likely impact on consumer spending.
JPM cut its price target for Premier Inns owner Whitbread to 4,100p from 4,150p but maintained its overweight rating.
The broker said it was more positive on Whitbread due to the potential upside its German business, while its freehold also provides some support to the valuation.