STOCKS NEWS EUROPE-Credit Suisse upgrades Continental Europe

Fri Jul 19, 2013 3:41am EDT

Credit Suisse upgrades Continental Europe to 'benchmark' on the back of improved economic momentum, and cites Deutsche Post and Atos as among those firms with good domestic exposure and an improving earnings outlook.

"Critically, peripheral Europe and domestic demand proxies are improving. For the first time this year, Continental Europe is no longer bottom of our macro scorecard," it says in a note, adding there is more fiscal flexibility in the euro area and France is showing signs of reforms.

It upgrades France to 'benchmark', flagging the market's attractive valuation and improving economic data, and ranks Axa , Publicis and Lagardere as 'outperform' because of their positive earnings revisions.

Credit Suisse says it is 'overweight' on media, hotels, software, autos and airlines sectors and finds Ahold, Adidas and Nestle looking abnormally cheap versus U.S. peers.

Reuters messaging rm://atul.prakash.thomsonreuters.com@reuters.net

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