* FTSEurofirst 300 flat
* Vodafone falls after results
* Credit Suisse up after tax settlement
By Tricia Wright
LONDON, May 20 (Reuters) - European shares traded flat on Tuesday, held back by Vodafone, after the world's second-largest mobile network operator reported huge impairment costs.
Vodafone shed 4.1 percent, making it the biggest faller on the FTSEurofirst 300, after it recorded 6.6 billion pounds ($11 billion) in impairments due to fierce competition and regulatory changes in Europe.
"The writedowns across several European regions are further proof of the challenges the company is facing, with underlying profit continuing to move in the wrong direction," said Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers.
At 1104 GMT, the FTSEurofirst 300 index, which last week hit a six-year high of 1,372.81, was flat at 1,358.58 points.
Equity markets have been buoyed in recent weeks by a burst of dealmaking and bids, particularly in the healthcare sector, although lofty valuations are preventing some investors from putting more money to work in equities.
The STOXX Europe 600 is trading on a 12-month forward price/earning ratio of 14.3 times, against its 10-year average of 11.8 times, Thomson Reuters Datastream shows.
"I do feel that for many investors a pullback... would be very welcome for them because they tend to sort of look at certain parts of the market as being kind of expensive on traditional metrics," said Paras Anand, head of pan-European equities at Fidelity Worldwide Investment.
"However, I think that the potential for growth of M&A ... (means that) the market could be better supported in the short term than some people expect."
Among bright spots, Credit Suisse advanced 1.1 percent after agreeing to pay a $2.5 billion fine to U.S. authorities for helping Americans evade taxes. Some analysts said it was a relief for investors that the issue was settled.
"(The penalty) was no worse than expected," Michael Hewson, CMC Markets' senior analyst, said. "It's one piece of uncertainty that's now in the rear view mirror."
The Swiss bank's chief financial officer said it has seen no material impact on its business from the settlement.
"This is not a lot of money compared to settlements before," said Andy Ash, head of sales at Monument Securities. "These are the first people who admitted that they were wrong and I think the market, whether they're right or wrong, have taken it that they got away lightly."
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up (Additional reporting by Atul Prakash and Francesco Canepa; Editing by Hugh Lawson)