** DS Smith falls 3 pct after Jefferies downgradesstock to "hold" from "buy"
** Says paper and packaging co likely to lag into year endafter outperformance over peers in Q3
** Also notes rich valuation: trades on 16x FY16 P/E, at apremium to Mondi, Smurfit Kappa and RPC
** Third top faller and most traded by average 30-dayvolumes on Stoxx 600
** Broker also upgrades BillerudKorsnas to "buy"from "hold", citing attractive entry point (24 pct EPS upgradesover last year but share 25 pct off year highs)
** Preferred over DS Smith for its 100 pct packaging focus,with paper expected to see demand headwinds
(RM: alasdair.pal.thomsonreuters.com@reuters.net)