BUZZ-Top of the Street: EU auto parts, Centrica, E.ON, Paddy Power Betfair

A round-up of notable broker activity this morning from Europe's top-ranked* analysts:

** RBC double-downgrades Centrica (Frankfurt: A0DK6K - news) to "underperform", as it says dividend cut is "inevitable", points also to co lacking visible growth and significant competitive pressure

** Jefferies believes E.ON is "losing its spark", pointing to challenges facing co's downstream businesses, especially in retail; cuts to "underperform" from "hold"

** HSBC sees no obvious negative short-term catalysts for Paddy Power Betfair (Other OTC: PDYPF - news) and raises to "hold", but remains "cautious" on long-term prospects for betting exchange

INITIATIONS AND REINSTATEMENTS

** Barclays (LSE: BARC.L - news) says EU auto parts and tyremakers sector has entered a period of "stagflation", with almost no vol. growth expected

** Starts Michelin with "overweight", believing relatively limited exposure to China should help the group

** Broker initiates also Faurecia (Swiss: EO.SW - news) with "overweight", as it expects co's outperformance over peers to continue in coming years

** Initiates Continental with "equal-weight", pointing to lack of top-line and earnings momentum in short term

** Valeo (Berlin: 32745150.BE - news) "is victim of its own commercial success", Barclays says, seeing it to limit co's ability to drastically slow R&D/capex momentum -- starts with "underweight"

(*Analyst rankings from Thomson Reuters StarMine. Scale is from 1-star to 5-star with 5 being best. Analysts ranked on earnings accuracy as well as relative performance of recommendations over trailing 12-month & 24-month periods.)