(Reuters) - Hotelier InterContinental Hotels Group (IHG) (IHG.L) said the new U.S. tax bill is expected to reduce the group’s tax rate by a mid- to high-single-digit percentage point next year from the current rate in the low 30s.
The operator of brands such as Crowne Plaza, Holiday Inn and InterContinental, in a brief statement, said the measure in the tax bill will result in one-off tax credit in the year it is signed into law.
The Republican-controlled U.S. House of Representatives gave final approval on Wednesday to the biggest overhaul of the U.S. tax code in 30 years.
The bill keeps the existing number of tax brackets but adjusts many of the rates and income levels for each. The top tax rate for high earners is reduced.
The United States is the largest market for the hotel group in terms of room numbers and contributed to about 58 percent of company’s revenue in 2016, according to their last annual report.
Morgan Stanley, in a client note, said that a 5-9 percent tax rate reduction would be equivalent to a 7-13 percent EPS upgrade, pushing up its target price on the stock to 46 pounds from 42 pounds.
Shares in the company, which runs over 5,000 hotels in about 100 countries, were up 1.2 percent at 0941 GMT.
Reporting by Rahul B in Bengaluru; Editing by Sunil Nair