Broker snap: IHG 'in line', but no growth in 2011

15th Feb 2011 13:42

RBS keeps its 'hold' rating on InterContinental Hotels (IHG) after the Holiday Inns owner's 2010 revenues, earnings and profits being in line with expectations."Everything at IHG was 'bang in line'", says analyst Jason Streets. The statement also included remarks about refreshing its Crowne Plaza branded hotels and selling the InterConti in New York.However, as no details on the financial implications for either of these were given, Streets says "we don't see why numbers or expectations should change on the back of this but the tone is confident." Additionally, RBS expects room growth to be flat in 2011."The bottom line with IHG is that the scale of the business is such that by far the most important driver of profitability is the global economy and investors' views on the strength or otherwise of that should determine their view on the stock in our view."While the upside is "finely balanced" with risks of growth slowing as and when interest rates begin to rise, the broker sits on the fence with a target price of 1,375p.