STOCKS NEWS EUROPE-Infineon drops as Goldman sees limited upside

Shares in Infineon (Xetra: 623100 - news) fall 2.1 percent to the bottom of Germany's blue-chip DAX index after Goldman Sachs (NYSE: GS-PB - news) cuts its rating on the chipmaker to "neutral" from "buy", saying it sees limited upside potential following its outperformance since it was added to Goldman's "Buy List" in May 2009.

"Outperformance was driven by a cyclical recovery principally in automotive and industrial-end markets, leading to better operational gearing than anticipated by consensus... The shares are now closer to factoring in a robust semis upcycle," Goldman Sachs writes in a note to clients.

Infineon shares are at a 4-week low but still trade 40 percent above their 52-week low in April last year, outperforming the European technology index which is almost 23 percent above that level.

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