Most hotels around the globe had to close their doors last year due to restrictions imposed to curb the spread of the deadly COVID-19 virus. While the industry began recovering earlier this year the resurgence of COVID-19 cases due to…
the rapid spread of the Delta variant has fostered concerns related to the pace of the sector’s recovery.
However, increasing vaccinations could lead to more leisure travel and, in turn, increase the hotels’ occupancy rate. According to the U.S. Lodging Industry and Market Outlook from Lodging Analytics Research & Consulting (LARC), the U.S. RevPAR is expected to increase by 30.6% in 2021 and at a 16% CAGR from 2020 through 2025.
Given this backdrop, we think prominent hotel stocks InterContinental Hotels Group PLC (IHG – Get Rating), Choice Hotels International, Inc. (CHH – Get Rating), and Wyndham Hotels & Resorts, Inc. (WH – Get Rating), which are currently trading significantly below their 52-week price highs, could be solid bets.
Headquartered in Denham, in the U.K., IHG owns, manages, franchises, and leases hotels across the United States, Europe, Asia, and internationally. The company operates roughly 5,994 hotels and 884,484 rooms in more than 100 countries.
On September 8, IHG introduced artificial intelligence (AI)-focused voice-controlled smart rooms at the Kimpton Rowan Hotel in Palm Springs, Calif., in partnership with Josh.ai. As the first global hotel company to deploy Josh.ai, the move is expected to give it an edge over its peers.
IHG’s total revenue increased 15.8% year-over-year to $565 million for the six months ended June 30, 2021. The company’s operating profit came in at $138 million, versus a $233 million loss in the year-ago period. Its adjusted EBITDA increased 117.8% year-over-year to $233 million. Also, its EPS was $0.40, up 724.5% year-over-year.
For its fiscal year 2021, analysts expect IHG’s revenue to be $1.40 billion, representing a 40.9% year-over-year rise. In addition, its EPS is expected to increase 280% year-over-year to $1.19 in its fiscal 2021. Over the past year, the stock has gained 9% in price to close yesterday’s trading session at $62.72. Also, the stock is currently trading 16.6% below its 52-week high of $75.20, which it hit on February 22, 2021.
IHG’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock has an A grade for Sentiment, and a B grade for Growth and Quality. Within the Travel – Hotels/Resorts industry, it is ranked #3 of 19 stocks. Click here to see the additional POWR Ratings for Stability, Value, and Momentum for IHG.
CHH is a global hotel franchisor worldwide. The Rockville, Md.-based company operates in two segments: Hotel Franchising and Corporate & Other. It franchises lodging properties under the brand names of Comfort Inn, Comfort Suites, Quality, and Clarion. The company also…
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