FBR halves Morgan Stanley Q3 earnings view
Oct 6 (Reuters) - FBR Capital Markets almost halved its third-quarter earnings view for Morgan Stanley (MS.N), citing lower sequential revenue, and said it expects medium-sized brokers to make up some ground over larger competition.
The third-quarter institutional trading revenue for Morgan Stanley is likely to be affected by a $500 million debt-value adjustment, analyst Steve Stelmach wrote in a note to clients.
He expects Morgan Stanley to report earnings of 26 cents a share for the third quarter.
Stelmach expects large-sized Goldman Sachs (GS.N) and Morgan Stanley (MS.N) to report modestly below consensus estimates, and mid-caps KBW Inc (KBW.N) and Piper Jaffray (PJC.N) to beat estimates.
FBR Capital increased its price target of KBW shares to $28 from $25 to reflect peer-group earnings multiple, and on Jefferies' shares to $23 from $18 given long-term positive fundamentals.
The brokerage, however, said it expects Jefferies to miss third-quarter consensus estimates.
Shares of Morgan Stanley closed $29.84 Monday on the New York Stock Exchange, while those of Goldman Sachs closed at $186.47.
(Reporting by Thyagaraju Adinarayan; Editing by Unnikrishnan Nair)
((thyagaraju.adinarayan@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: thyagaraju.adinarayan.reuters.com@reuters.net)) Keywords: MORGANSTANLEY/RESEARCH FBRCAPITAL
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