InterContinental Hotels Group PLC

AI-generated fair value estimate for this company.

Method: Two-stage unlevered FCF DCF using adjusted (fee-based) free cash flow: FCF base of $893M (FY2025 adjusted FCF) growing 10%/yr years 1-5 (consistent with management's high-single-digit fee revenue growth plus margin expansion), fading to 6%/yr years 6-10, 3% terminal growth, 8% discount rate (stable, investment-grade, asset-light franchise model); less net debt of $3,333M

Reasoning: IHG is an asset-light hotel franchisor; fee revenue ($1,897M, +7% YoY, 64.8% margin) rather than gross system revenue ($5,189M, which includes cost-reimbursement) is the correct economic driver. DCF value of ~$24.4B is closely aligned with the ~$23.76B market cap, consistent with management's own stated medium/long-term target of +12-15% adjusted EPS CAGR