Goldman Sachs has increased its 12-month price target for InterContinental Hotels Group to $190 from $188 and reaffirmed a "buy" recommendation on the shares. The brokerage attributed the move to more resilient U.S. industry revenue per available room trends and a smaller-than-anticipated effect from the Middle East on demand.
The bank said U.S. industry RevPAR has "continued to track above our prior forecasts - with stronger trends in April and May vs. 1Q, even before the benefit of the FIFA World Cup in June." In addition to the U.S., Goldman Sachs noted that Middle East industry data are "tracking slightly better than our prior (conservative) scenario," and that several other countries across Europe, the Middle East, Africa and Asia (EMEAA) are also performing a bit better than the bank had assumed.
On the back of those observations, Goldman Sachs raised its second-quarter 2026 RevPAR forecast to 3% from 1.8%, and lifted its full-year 2026 RevPAR forecast to 3.2% from 2.7%. The analysts said they are "giving some credit for stronger US RevPAR in 3Q," but they stopped short of extending that improvement into the fourth quarter.
Turning to unit growth, Goldman Sachs projects net unit expansion of 4.9% for the first half of 2026. The brokerage described underlying momentum in openings as building, but noted this is partially offset by the anniversary of the Ruby openings from the prior year.
On full-year company estimates, Goldman Sachs now expects operating profit from reportable segments of $1.39 billion for 2026, which it describes as "slightly above company-compiled consensus." The bank forecasts earnings-per-share growth of 13% for 2026, and revised its revenue estimate for the year to $2.63 billion from $2.62 billion. Its revenue projection for 2028 remains broadly unchanged at $2.97 billion.
Analysts adjusted their EPS forecasts modestly: 2026 EPS moved to $5.61 from $5.60, while the 2027 EPS estimate was trimmed to $6.37 from $6.39. Despite the small changes, Goldman Sachs reiterated its conviction that IHG "can compound EPS at a higher rate than consensus expects over the medium term," forecasting a compound annual EPS growth rate of approximately 14% over 2025 to 2030.
Goldman Sachs highlighted a set of structural drivers underpinning its outlook, pointing to an "enhanced long-term EPS growth algorithm, faster net unit growth, improved enterprise platform, and optionality on ancillary revenue streams" as reasons the group merits a narrower valuation discount relative to key U.S. peers.
The $190 price target is derived from Goldman Sachs' EV/IC framework versus growth and returns, based on the bank's second-half 2027 and first-half 2028 estimates. The analysts also listed a number of risks that could undermine their thesis, including weaker-than-expected RevPAR trends, lower net unit growth, deterioration in brands or distribution capabilities, geopolitical demand shocks, travel restrictions, higher competitor supply growth, execution risk on mergers and acquisitions, and foreign exchange volatility.
Market context and takeaway
The broker's update reflects a modest upward re-rating for IHG driven primarily by near-term demand outperformance in the U.S. and a less damaging outlook for Middle East demand than previously assumed. Estimates for revenue and operating profit have been nudged higher for 2026, while EPS forecasts have seen only small revisions. Goldman Sachs continues to expect above-consensus medium-term EPS compound growth for the company.