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The 2016 All-Europe Research Team: Chemicals, No. 3: Paul Walsh & team

Paul Walsh steers Morgan Stanley’s regional chemicals squad back up to the third-place position it held in 2012 and 2013;

Paul Walsh & team
Morgan Stanley
First-place appearances: 0

Total appearances: 15

Team debut: 1989

Paul Walsh steers Morgan Stanley’s regional chemicals squad back up to the third-place position it held in 2012 and 2013; the researchers merited runner-up positions the past two years. Two of the team members are stationed in London and a third is in Zurich — and among the 23 names in their sector portfolio, Covestro is a favorite. The group initiated coverage on the German plastics maker in November, deeming its stock undervalued given the company’s elevated dividend yield and high-return coatings business. Walsh and his colleagues urged investors to overweight the stock, and two months later it was leading European chemicals names overall by 23.5 percentage points, having risen 9.9 percent, to €31.08. They continue to recommend Covestro, in part thanks to increasing free-cash-flow yield, and assign it a price objective of €36. The group also likes Swiss specialty chemicals provider Clariant, considering it an organic growth story with superior earnings momentum. At Sf22, the analysts’ target for the shares implies a 34.1 percent upside to their trading level in mid-January. Walsh, 39, “is a go-getter, and I trust his views implicitly,” avows one money manager.


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