STOCKS NEWS EUROPE-Faurecia up; BofA Merrill upgrades

Shares in French car parts group Faurecia (EPED.PA) rise 1.1 percent in a downward market after Bank of America Merrill Lynch upgrades its rating on the stock to "buy" from "neutral", citing the stock's recent underperformance.

"Faurecia shares are down 14 percent in a month, underperforming their peer group and the sector on profit-taking and concerns about potential dilution following the announcement of the Emcon acquisition and the launch of a convertible bond last week," BofA Merrill Lynch write in a note.

"Like Valeo (VLOF.PA), Faurecia should strongly benefit from the ongoing transformation of the global auto components industry, being one of the few survivors in some key segments for automakers," it says.

"Faurecia is set to become the world leader in exhaust systems --their most attractive division, in our view-- starting in January 2010, assuming that anti-competition authorities approve the Emcon acquisition with no delay."

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