STOCKS NEWS EUROPE-EADS up as Merrill upgrades to "buy"

Shares in European aerospace group EADS (EAD.PA) gain 0.7 percent, outperforming the FTSEurofirst 300's .FTEU3 1.6 percent drop, after Banc of America-Merrill Lynch upgrades its rating on the stock to "buy" from "underperform" and raises its price target to 15 euros from 9 euros.

"Relevant leading indicators such as the Airline Index, consumer confidence and air freight traffic data have bottomed and are trending up. We expect the leading indicators to continue to go up," Banc of America-Merrill Lynch analysts say in a note.

"Leading indicators performance is well correlated to EADS P/E (price/earnings). We expect a further expansion in EADS multiples as leading indicators recover which should dominate EADS performance over the near-term."

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