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Jefferies start InterContinental at 'buy', Whitbread at 'hold'

By Michele Maatouk

Date: Tuesday 17 Sep 2019

Jefferies start InterContinental at 'buy', Whitbread at 'hold'

(Sharecast News) - Jefferies initiated coverage of InterContinental Hotels Group and Whitbread on Tuesday as it took a look at the European hotels sector.
The bank started IHG at 'buy' with a 6,200p price target. Jefferies expects to see higher free cash flow, returned to shareholders via dividends, which it assumes will grow by 10% a year going forward, and via special dividends.

It said the recent share price weakness driven by disruption in China and US peer revenue per available room downgrades is likely temporary and more than offset by the strong pipeline.

Jefferies started coverage of Premier Inn owner Whitbread at 'hold' with a 4,500p price target.

"We think that Whitbread's impressive track record and dominant position in the UK are signs of a well-run company," it said.

The bank said it awaits more clarity on the political situation in the UK, along with signs of progress in Germany before turning positive on the stock.

In the same note, the bank also initiated coverage of PPHE Hotel Group at 'buy' with a 2,200p price target and France's Accor at 'buy' with a €52 price target.

At 1420 BST, IHG shares were up 1% at 5,065p and Whitbread shares were down 0.7% at 4,395p.


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