Dec 18 (Reuters) - Wall Street analysts trimmed their 2009 profit view on Morgan Stanley (MS.N), a day after the bank posted its second loss in the last five quarters.
Sanford C. Bernstein’s Brad Hintz expects the company’s trading and principal investments to be weak going forward. He cut his 2009 profit view on the company by 5 percent to $3.39 a share.
“Morgan Stanley faces the first global economic slowdown in modern times. This is certainly not a favorable environment for a leading capital markets firm,” Hintz said.
But the analyst believes Morgan Stanley will survive, with government support of the holding company funding, access to the discount window for the U.S. and the UK broker dealers, new capital from the U.S. government and from third parties, and relatively modest legacy exposure positions.
Hintz maintained his $50 price target and “outperform” rating on the stock.
Wachovia’s Douglas Sipkin also cut his 2009 earnings view on the company by 8 percent to $2.61 a share.
Sipkin, who rates the stock “outperform,” said Morgan’s diversity combined with the company’s leading global equity and advisory franchise bodes well for the long term.
Morgan Stanley stock was trading at $16.40 before the bell, 10 cents lower than its Wednesday closing price on the New York Stock Exchange. (Reporting by Sweta Singh in Bangalore; Editing by Pratish Narayanan)