Broker snap: IHG a 'buy' on US exposure, says Investec

13th Jul 2012 11:17

Shares of InterContinental Hotels (IHG) were taken down a peg on Thursday after US peer Marriott scaled back its international revenue per available room (RevPAR) guidance; nevertheless, Investec has stayed positive on the British hotels firm, keeps its 'buy' rating and 1,700p target price."Sceptics of the global hotels recovery had a field day following the Marriott Q2 results on 11 July. In our view, they are wrong. Marriott is forecasting group RevPAR growth of 6-8% in 2012. This alone places our FY12E estimates for IHG (47% exposed to the US) under severe upside pressure," the broker said."We expect Q2 results from other major US operators to support our bullish view on IHG's US trading and we reiterate our 'buy' recommendation." Results from Wyndham, Starwood and Hyatt are due in the next few weeks.As well as IHG's US exposure, Investec has highlighted the long-term opportunity in China (beyond short-term peaks and troughs).The broker says that it is a buyer into the first-half results on August 7th and feels that the negative share price reaction to Marriott represents an opportunity for investors.By 11:16 on Friday, shares were trading 1.33% lower at 1,483p.BC