IHG and Whitbread upgraded as JPMorgan sees business travel concerns as overdone

InterContinental Hotels PLC (LON:IHG) and Whitbread PLC (LON:WTB) have both been upgraded by JPMorgan Cazenove as analysts reckon concerns over the future of business travel “are overdone”.

“Simply, we trust that the hoteliers will get back to previous profitability levels, and quicker,” said analyst Estelle Weingrod as she took up coverage of the sector and lifted both IGH and Whitbread to ‘neutral’ from ‘underweight’ ratings.

Now with a better grip of the structural change in the hotels sector six months into the coronavirus pandemic, the analyst now forecasts the hoteliers going back to profitability peaks within three years.

This compares to five years for caterers, with Compass Group PLC (LON:CPG) staying at ‘underweight’ as the analyst has reservations what the pandemic “will likely trigger unprecedented changes to the longer term business models” that ultimately will trigger a revenue and profitability reset below market expectations.

IHG’s share price target was lifted to 4,400p from 3,350p and Whitbread’s to 2,400p from 2,050p.