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InterContinental Hotels Group PLC (IHG)
Intrinsic Value (DCF)
Current$137.92
→
Intrinsic$71.70
-48%
$43.75$71.70$124.83
Market implies 28% growth for 5 years
Current price reflects execution expectations above 13% growth — not unreasonable for quality businesses.
At $138, the market prices in continued strong cash flow growth (28%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $44 → Bull $125. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 9% | 11% | 13% | 15% |
|---|---|---|---|---|
| 8% | $89 | $99 | $109 | $119 |
| 10% | $58 | $65 | $72 | $79 |
| 12% | $41 | $46 | $51 | $57 |
| 14% | $31 | $34 | $38 | $43 |
Bull Case
- Bull case ($125) with 16% growth, 9% discount rate
- Conservative 13% growth assumption is achievable based on track record
Bear Case
- Bear case ($44) implies 68% downside at 10% growth, 12% discount
- Price reflects 28% growth expectations vs 13% historical — high bar to clear
- Trading 48% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$729.95M
Year 2$824.82M
Year 3$932.01M
Year 4$1.05B
Year 5$1.19B
Terminal$17.51B
📐 Model Inputs
Growth Rate13.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$646.00MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.