STOCKS NEWS EUROPE-ITV shares rise on UBS upgrade

Shares in British broadcaster ITV (ITV.L) rise as much as 3 percent after UBS upgrades the stock to "buy" and its price target to 37 pence, saying it sees increased probability that ITV could switch to a pay-TV model from an ad-funded one.

"We believe ITV is differentiated from its peers by potential upside from the adoption of a subscription model. Our analysis suggests foregone advertising revenues would be more than offset by carriage fees from pay TV retailers," UBS writes.

British regulator Ofcom is currently conducting a review of the UK pay-TV market, which is likely to result in BSkyB's (BSY.L) having to offer its premium sport and movie content to pay-TV rivals, reducing its competitive advantage.

ITV shares are up 2.3 percent to 32.75 pence, off an earlier high of 33.5 pence, and leading the gainers in a 0.3 percent-weaker European media index .SXMP.

Reuters Messaging rm://georgina.prodhan.reuters.com@reuters.net