InterContinental Hotels (full-year earnings 20 February)
InterContinental Hotels is expected to report an 18% rise in earnings for the year to $2.39 per share, while revenue rises 4.8% to $1.8 billion. The former has beaten estimates for eight successive years, although for the latter it is just four out of the last eight. Growth in its mid-price US hotels continues to drive improvement, and this rise in profits is also expected to see dividends boosted as well. At 23.2 times forward earnings, the stock is above the two-year average of 21.5, but a yield of 2.1% helps to offset this. The stock tends to see an average move of 2% on results day, with current options pricing suggesting a 0.86% move.
The rally here goes on, having recovered strongly from the August lows. A dip below £44.90 in early February was followed up by a strong rebound, pushing the price back above the 50-day simple moving average (SMA) at £46.69. Further gains will target the recent high at £49.44. A failure to maintain momentum would suggest a move back to £44.90, and then potentially down towards the rising trendline from the June 2016 lows.