UPDATE 1-Wall St. brokers see 2008 loss for Marshall & Ilsley
(Recasts; adds details, share movement)
July 7 (Reuters) - Several Wall Street brokers reversed their 2008 forecast on Wisconsin's largest bank Marshall & Ilsley Corp MI.N to a loss, after the company said it expects a huge second-quarter loss due to increased provision for bad loans.
J.P. Morgan & Securities and Morgan Keegan downgraded the stock and said there was a possibility of a dividend cut by the bank. Shares of the company fell as much as 12 percent to a new 52-week low in morning trade.
On July 3, Marshall & Ilsley had said it would keep aside as much as $900 million for covering bad loans and would write off up to $415 million of loans and leases in the second quarter.
The write-offs were generated from deteriorating housing markets in the states of Arizona and Florida -- two of the worst hit states by the tumbling property prices.
JP Morgan downgraded the stock to "underweight" from "neutral" and Morgan Keegan cut it to "market perform" from "outperform."
"Not only has the credit picture meaningfully deteriorated from the prior quarter, it appears that the problems are running deeper than at peer banks," JP Morgan said.
Ladenburg Thalmann's analyst Richard Bove expects Marshall & Ilsley to post a loss of 6 cents a share for 2008, down from his prior estimate of profit of $1.77 a share.
The problems the bank faces extend to other parts of its business and will lower its secular growth rate, Bove said in a note to clients. Continuación...