STOCKS NEWS EUROPE-Snam Rete Gas higher on upgrade

Snam Rete Gas (SRG.MI) gains 2.8 percent to 3.08 euros, outperforming the the DJ Stoxx utilities index .SX6P which gains 0.5 percent after Credit Suisse raises its rating on the Italian gas transmission grid operator.

Credit Suisse upgrades its rating on Snam to "outperform" from "neutral" as it has cut its target price to 3.65 euros from 4.60 to reflect the higher number of shares following the group's recent rights issue, it says in a note.

The broker says the planned acquisition of gas storage unit Stogit and gas distribution network Italgas from parent company Eni (ENI.MI) is the key driver of its valuation.

"It allows Snam to become a leader in the gas regulated business with the potential to exploit cost and capex synergies and optimise its asset base," the broker says.

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