STOCKS NEWS EUROPE-Hugo Boss gains on BofA double upgrade to "buy"

Shares in Hugo Boss (Other OTC: BOSSY - news) rise 2.5 percent to the top of Germany's mid-cap index in early trade after Bank of America Merrill Lynch raises the stock to "buy" from "underperform", saying its price does not reflect the fashion house's medium-term growth opportunities.

"Hugo Boss is trading on 17x 2014E EPS, 5 percent below luxury peers despite having lower maturity & better penetration opportunities; a retail rollout story; above-sector EPS growth; twice the dividend yield; the potential for a capital return; and a multiple re-rating towards retail peers," BofA Merrill Lynch analysts write in a note to clients.

The comments come three weeks after Hugo Boss voiced confidence of stronger growth this year as it continues to open more of its own stores, its new womenswear designer launches his first collection, and as an economic recovery in Europe takes hold.

Shares in Hugo Boss have gained 9 percent over the past year, underperforming a 30 percent gain by the MDAX index.

Reuters messaging rm://maria.sheahan.thomsonreuters.com@reuters.net