Shares in Swiss-based food group Nestle surged on Thursday following a broker upgrade and after L'Oreal, the French cosmetics firm in which Nestle owns 21 percent, said it would pursue a share buyback plan.

L'Oreal said late on Wednesday that it aimed to buy back 1.25 billion euros ($1.7 billion) worth of its shares in the next 12 months, in line with a vote taken at its annual shareholder meeting in April.

Separately, Deutsche Bank raised its investor recommendation on Nestle to buy from hold with a target price 520 francs, traders said.

Nestle shares were up 2.34 percent at 459.25 francs at 0721 GMT, the lead gainer in the European food and beverage sector, which was up 0.7 percent at the same time.