The 2016 All-Europe Research Team: Building & Construction, No. 1: Arnaud Lehmann & team

Bank of America Merrill Lynch leads this pack for a second consecutive year.


< The 2016 All-Europe Research Team


Arnaud Lehmann & team
Bank of America
Merrill Lynch
First-Place Appearances: 2

Total Appearances: 29

Team Debut: 1990

Bank of America Merrill Lynch leads this pack for a second consecutive year. Spearheading the firm’s tracking of 27 European building and construction names is 38-year-old Arnaud Lehmann, whom one portfolio manager credits with possessing “encyclopedic knowledge that’s unmatched.” The three London-based researchers dub British engineering and construction giant Balfour Beatty a favorite in this space. They raised their rating on the stock from neutral to buy in November 2014, on the contractor’s solid balance sheet after management’s ejection of underperforming units. Sure enough, through the middle of last month, the stock soared 54 percent, to 251.10p, outperforming the regional market by 62 percentage points. In May the trio began covering Ireland’s Kingspan Group, which provides building envelope technologies and high-performance insulation. Highlighting, in part, the company’s superior earnings-per-share growth, Lehmann and his colleagues encouraged clients to buy the shares. By mid-January they had risen 13.5 percent, to €22.80, while Europe’s stocks overall tumbled 17.3 percent. Moving in the other direction on Irish buildings supplier CRH, BofA Merrill’s group lowered its rating on the building materials supplier’s London-listed shares from buy to underperform in November, citing an expected slowdown in demand from the Americas. In mid-January the stock value was little changed, at 1,784p, but Lehmann’s team projects a decline to 1,500p. “One ignores their recommendations at one’s own peril,” cautions another admirer.