STOCKS NEWS EUROPE-Citi bullish on U.S. equities, bearish on Europe


Citi upgrades U.S. equities to "overweight" despite a slowing world economy withrisks to the downside, while avoiding Japanese and euro zone equities on profitconcerns.

"The combination of strong earnings per share (EPS) momentum and a veryaggressive central bank are reasons why we upgrade the US to overweight fromneutral," analysts say in a note

The upgrade of the U.S. comes at the expense of Japan, which is downgradedfrom "neutral" to "underweight", with profit recovery since the earthquake in2011 coming in below the bank's expectations.

The euro zone is maintained as "underweight".

"The economic recession in the euro zone is only part way through and oureconomists don't forecast growth to return for some time yet. This shouldcontinue to be a drag on EPS for some time to come," the investment bank says.

Within Europe, the analysts prefer pharamceuticals and media, while avoidingeuro zone construction and retailing in the euro zone, and like the UnitedKingdom, seeing a shorter lived recession there than on the continent.

Reuters messaging rm://alistair.smout.thomsonreuters.com@reuters.net