STOCKS NEWS EUROPE-Lafarge sags, Hochtief rises on GS note

Shares in French cement maker Lafarge (Munich: CIL.MU - news) drop 3.4 percent and Swiss rival Holcim (Other OTC: HCMLF - news) falls 2 percent, while German builder Hochtief (Berlin: HOT.BE - news) rises 4.6 percent as traders cite a research note on the sector by Goldman Sachs (NYSE: GS-PB - news) analysts.

The analysts downgrade their recommendation on Lafarge and Holcim to 'sell' from 'neutral'.

"Our cautious view is based on unattractive risk-reward on our scenario analysis," the analysts write about Lafarge's stock.

"Currency has accounted for 56 percent of the group's EBITDA decline since 2007 and this, coupled with low developed market exposure, limits upside normalization potential versus peers," the analysts write about Holcim.

"Furthermore, the stock fares poorly on our emerging market downside stress, with 50 percent of capacity in markets that have seen major currency falls in the last year."

The analysts upgrade their recommendation on Hochtief (Other OTC: HOCFF - news) to 'buy' from 'neutral'.

"The company continues to restructure and we expect improving profitability in the core construction businesses to emerge," the analysts say.

According to MSCI (NYSE: MSCI - news) data, Lafarge and Holcim have among the biggest exposures to emerging markets of European companies, with 58 percent and 47 percent respectively of their revenue coming from such countries.

Reuters Messaging: blaise.robinson.thomsonreuters.com@reuters.net

upgrade Hochtief to Buy from Neutral.