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The 2015 All-Europe Research Team: Media, No. 2: Patrick Wellington & team
In its strongest showing to date, Morgan Stanley seizes the No. 2 position on this roster.
Total appearances: 20
Team debut: 1995
In its strongest showing to date, Morgan Stanley seizes the No. 2 position on this roster, advancing from runner-up after four years under the direction ofPatrick Wellington, who holds the distinction of having notched more appearances on Institutional Investor’s All-Europe Research Team than any other analyst (28). Working out of London, the 52-year-old leader reports on 12 companies directly and oversees his colleagues’ analyses of 16 additional names. They were positive on Europe’s media companies last year, and their sentiment hasn’t changed. For 2015 the analysts expect the standouts to be British education and publishing giant Pearson and TF1 Group, France’s largest over-the-air broadcaster, assigning an overweight rating to each company. Investors punished Pearson and TF1 last year, Wellington notes, sending the shares down 11.3 percent and 9.2 percent, respectively, to 1,190p and €12.72. During the same period, the sector rose 6.8 percent. “Pearson has suffered a cyclical downturn in U.S. state budgets and U.S. college enrollment, which has combined with heavy restructuring activity within the group,” he says. “The worst of these factors now appear behind it, and earnings and rating should recover in 2015.” They peg the stock at 1,350p. Regarding TF1, the team leader advises, “we think French TV advertising may surprise on the upside in 2015 and that this will combine with a very modest starting valuation to promote outperformance.” Morgan Stanley’s price objective for the shares is €16.50.