Carlsberg's shares have been upgraded at Deutsche Bank, according to dealers. The bank upped its recommendation to "buy" from "hold" following an update by the Danish brewer on its production synergies.

Last weekend, Carlsberg took some analysts to Lisbon, Portugal to provide details on its main cost saving initiative, known as Project Excellence. Deutsche Bank reported that early indications are that the first breweries to be overhauled have delivered savings ahead of expectations. The bank cited management as targeting DKK800m (US$130.9m) of synergies by 2006, suggesting a 22% uplift on 2003 EBITA profitability.

"Given the on-going fundamental challenges in many of Carlsberg's (western) European markets, inevitably a portion of these synergies will be reinvested in the business or lost in volume declines or price erosion," Deutsche told clients. "However, as confidence grows in Carlsberg's ability to deliver the gross savings, we feel comfortable upgrading our 2005 and 2006 estimates by 5% and 7% respectively."

Deutsche Bank also raised its price target on Carlsberg shares to DKK330 from 300.