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STOCKS NEWS EUROPE-DS Smith boosted by strong update on SCA deal

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Shares in DS Smith rise as much as 6 percent to their highest inmore than fifteen years after the British packaging maker says it expects tosave more than previously thought from its acquisition of the recycled packagingbusiness of Svenska Cellulosa Aktiebolaget (SCA) .

"Overall the update is much better than we expected, and we had reasonablybullish expectations," Investec Securities analyst Chris Dyett says in a note toclients.

"The positivity all relates to what the combined group is able to achieve incost and cash terms over the next three years, plus lower interest and taxassumptions."

As a result of the better than expected savings from the deal, Dyett says heis likely to increase his earnings per share estimate for 2013 and 2014 by 9percent to 15.5 pence and 13 percent to 21 pence, respectively.

DS Smith reported earnings of 12.8 pence for its latest year ended April 302012.

JPMorgan analysts call the update from the company a "positive start tomarried life" and raise their earnings per share estimates for 2013 and 2014 by6 percent and 9 percent, respectively.

"In our opinion, DS Smith is laying strong foundations for sustainableabove-trend earnings growth and enhanced returns on investment," the analystssay in a note.

For more on DS Smiths' update, click on To see a statement, please click on Reuters messaging rm://abhishek.takle.thomsonreuters.com@reuters.net

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