BUZZ-Capita: Jefferies upgrades 'deeply unloved' but 'slowly improving' stock

** British outsourcing group Capita (Taiwan OTC: T1614Y.TWO - news) +4.6 pct after Jefferies upgrades to "buy" vs "hold" (TP 750p from 465p)

** Analysts point to evidence of "considerable change" since Sept under its new chairman. Further portfolio reviews could result in non-core sales, the analysts say, adding initial calculations suggest a modest EPS impact

** Capita (LSE: CPI.L - news) 's CEO resigned in March after co reported a bigger than expected drop in profits and said it would take until 2018 before it could return to growth

** Jefferies analysts, however, say recent events at rivals Serco and Mitie suggest that a new CEO could remove significant cost if organisational complexity is reduced

** Capita is trying to become leaner and simpler, after years in which acquisitions were the main driver of revenue and its structure was considered by many analysts to have become unwieldy

** Co said last week that it expects to improve its profitability and secure more contract wins this year

** Jefferies analysts also say a full price for co's asset management services arm disposal would derisk the balance sheet

** Australian financial services firm Link Group and three buyout funds are putting the finishing touches to their rival offers for the asset

** "Capita is deeply unloved but risk/reward is slowly improving," the analysts say

** Third top riser on Stoxx 600 & second top on FTSE 250 (Reuters Messaging: noor.hussain.thomsonreuters.com@reuters.net)