InterContinental Hotels Group (IHG.L) 1H26 Strong net system growth of 5

Equity Research 11 August 2026 | 7:03AM BST

InterContinental Hotels Group (IHG.L) 1H26: Strong net system growth of 5.0% and RevPAR ahead; EPS growth of +13% despite 1H-weighting of cost growth

IHG.L 12m Price Target: $190.00 Price: $155.55 Upside: 22.1% BUY CL Ben Andrews, CFA IHG reported 1H26 results this morning (11 August), with operating | Goldman Sachs International profit from reportable segments of $665mn, in-line with Poppy Boyd-Taylor GSe/Visible Alpha Consensus Data adjusted for a $5mn | Goldman Sachs International insurance one-off expense, and Adj. EPS growth of +13% yoy (c.3pp ahead of Visible Alpha Consensus Data). Global RevPAR Leo Mose | Goldman Sachs International growth came in stronger than sell-side expectations in 2Q26 at +3.5% yoy (we had raised our forecast to +3.0% ahead of the print), with sequential improvements in the Americas offset by a Key Data _____________________________________ Market cap: $23.1bn full-quarter impact of the Middle East conflict and slower growth in Enterprise value: $27.2bn 3m ADTV: $64.2mn China. By geography, RevPAR growth accelerated in the Americas to United Kingdom +5.4% yoy in 2Q (vs. 1Q: +3.6%), including a c.+1.0pp benefit from Europe Travel and Leisure M&A Rank: 3 the World Cup in 2Q, with US RevPAR at +5.2% (vs. 1Q: +3.4%); Leases incl. in net debt & EV?: Yes

EMEAA RevPAR growth was +0.6% yoy (vs. 1Q: +5.6%), with Middle GS Forecast __________________________________ 12/25 12/26E 12/27E 12/28E East RevPAR down less than feared (-19% in 2Q); and Greater China Revenue ($ mn) New 2,468.0 2,636.7 2,800.5 2,983.5 slowed sequentially to +0.8% yoy (vs. 1Q: +5.7%), broadly in-line Revenue ($ mn) Old 2,468.0 2,626.3 2,786.1 2,968.5 EBIT ($ mn) 1,265.0 1,396.5 1,531.3 1,677.3 with industry data. EPS ($) New EPS ($) Old Net system growth for 2Q26 was +5.0% yoy, ahead of consensus. P/E (X) Dividend yield (%) 1.5 1.3 1.5 1.7 Underlying this, gross system growth was +6.5% yoy, with 2Q gross CROCI (%)

openings of 16.6k rooms (vs. 2Q25: c.14.1k excluding Ruby). IHG N debt/EBITDA (ex lease,X) 2.5 2.6 2.6 2.6

signed 27.8k rooms in the quarter, up c.10% yoy (2Q25: 25.3k 6/26 12/26E 6/27E 12/27E

rooms), taking the pipeline to 348k rooms (up from 343k at the end EPS ($)

of 1Q26; c.33% of current system size). GS Factor Profile ______________________________ Growth

Earnings: IHG’s 1H26 fee margin of 65.9% came in slightly below Financial Returns

expectations, though increased +120bps yoy, underlying which Multiple cost growth was +4% in 1H26. Management attributed this slightly higher-than-expected cost growth purely to timing, and are Integrated

confident of delivering a moderation in fee business cost growth in Percentile 20th 40th 60th 80th 100th 2H, leading to cost growth of +1-3% for the full year. IHG.L relative to Europe Coverage

Outlook: On the outlook for FY26, management noted they remain IHG.L relative to Europe Travel and Leisure

confident of achieving FY26 consensus profit and earnings Source: Company data, Goldman Sachs Research estimates. See disclosures for details. expectations (we note company-compiled consensus FY26 RevPAR

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

Goldman Sachs InterContinental Hotels Group (IHG.L)

InterContinental Hotels Group (IHG.L) Balance Sheet ($ mn) _______________________________________ 12/25 12/26E 12/27E 12/28E BUY CL Rating since Sep 18, 2024 Cash & cash equivalents 1,129.0 1, Accounts receivable Inventory 5.0 5.0 5.0 5.0 Ratios & Valuation __________________________________________ Other current assets /25 12/26E 12/27E 12/28E Total current assets 2,049.0 1,962.7 1,891.0 1,866.0 EV/sales (X) Net PP&E EV/EBITDAR (X) Net intangibles 1,155.0 1,132.4 1,108.7 1,083.8…