InterContinental Gains on Deutsche Bank Upgrade: London MoverPatrick Gower
InterContinental Hotels Group Plc, the world’s largest hotel-room provider, rose the most in more than 10 months after Deutsche Bank AG recommended buying the shares because they’re cheap compared with competitors.
InterContinental rose 3.7 percent, the biggest gain since Aug. 7, to close at 1,874 pence in London.
The company’s recent underperformance relative to competitors Accor SA and Whitbread Plc is “unjustified,” Deutsche Bank wrote in a note to clients today. The bank raised its recommendation to buy from hold and maintained a share-price target of 2,250 pence.
“The rating upgrade is purely based on the valuation anomaly that shows 25 percent upside” from the latest closing price, Deutsche Bank analysts including Paul Reynolds and Mairead Smith wrote in the note.
Intercontinental, based in Denham, England, has been selling assets as part of a strategy to focus on managing properties and brands such as Holiday Inn, Crowne Plaza and Hotel Indigo. The hotelier in March agreed to sell its London Park Lane Hotel to Middle Eastern investors for 301.5 million pounds ($460 million). It’s planning to sell the New York Barclay hotel.
InterContinental has underperformed Accor by 6 percent and Whitbread by 27 percent over the past quarter, according to the note.