UPDATE 1-Bernstein revises view on European capital market banks

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March 31 (Reuters) - Sanford C. Bernstein revised its forecasts for the European capital markets banks, saying pricing pressure on assets beyond their fundamental value should abate, as the banks and brokers credit is now de-facto guaranteed by the central bank.

Bernstein said it continues to believe that capital markets remain the superior form of managing and distributing risk and the investment banking industry should be able to continue to flourish.

The brokerage prefers banks with a product mix geared towards flow and volatility driven products such as foreign exchange, rates and equity derivatives and who are underweight advisory and underwriting and cash equities.

Bernstein cut Deutsche Bank's (DBKGn.DE) 2008 share view to 5.56 euros from 6.59 euros and expects writedowns of 1.8 billion euros. With Credit Suisse (CSGN.VX), it raised its 2008 share view to 2.21 swiss francs from 1.72 swiss francs, and sees writedowns of 5.3 billion swiss francs.

Bernstein sees UBS (UBSN.VX) posting a loss of 0.97 swiss francs per share for 2008, compared with its prior profit share view of 0.25 swiss francs. It expects writedowns of $9.8 billion.

Bernstein rates Deutsche Bank as "outperform" with a price target of 99 euros. It rates both UBS and Credit Suisse as "market perform". It has a price target of 38 swiss francs for UBS and price target of 58 swiss francs for Credit Suisse. (Reporting by Jennifer Robin Raj in Bangalore; Editing by Bernard Orr)