Brokerage Lehman raises European beverages sector

In a research note, Lehman said that within the overall consumer space, it retained its negative sector views on tobacco and food.

The brokerage said after a strong performance in share prices in 2006, the European consumer sector’s valuation, relative to the market, has moved up to a historically high level.

Though this could constrain the overall consumer performance in 2007, Lehman said it has identified stocks which could outperform.

The brokerage was reported as saying that it revised forced ranking of its favourite European consumer stocks, all of them with "overweight" ratings, by replacing Imperial Tobacco with SABMiller. Parmalat SpA, LVMH, Nestlé, InBev, Reckitt Benckiser and SABMiller are in the new list in order of preference, it said.