Is the Intercontinental Hotels share price (LON:IHG) expensive at 4,537p?

Intercontinental Hotels (LON:IHG) is a large cap hotel company that franchises its brands to, and manages hotels on behalf of, third-party hotel owners . Its extensive portfolio of brands includes InterContinental, HUALUXE, Kimpton, Crowne Plaza, Hotel Indigo, EVEN Hotels, Holiday Inn, Holiday Inn Express, Holiday Inn Resort and Regent Hotels & Resorts.

Right now the Intercontinental Hotels share price is on the expensive side from a factor perspective, based on its Value Rank of 29. Let's see why this is.

A closer look at Intercontinental Hotels' Value Rank

We can see by using Intercontinental Hotels’s StockReport that the group has a:

• Negative rolling price to book value,
• Trailing twelve month price to earnings ratio of 20.4
• Trailing twelve month price to free cashflow of 27.2
• Rolling dividend yield of 2.14%
• Trailing twelve-month price to sales ratio of 2.36

This combination of financial traits suggests that Intercontinental Hotels stock is toward the more expensive end of the market. Being expensive is not the end of the world, of course - but it does help to have favourable exposures to other factors to justify the share price premium.

What does this mean for potential investors?

Some of the best quality stocks in the market have defensible models that can deliver high levels of shareholder returns over the long term. But there are no guarantees and it's important to do your own research. Indeed, we've identified some areas of concern with Intercontinental Hotels that you can find out about here.