Oppenheimer Lowers Morgan Stanley Outlook

With most of the fourth quarter under its belt, Oppenheimer said that it is making relatively few and minor changes to its earnings estimates. “The most substantial is a cut for Morgan Stanley MS in 4Q from $0.67 to $0.35 (reflecting partly a weaker than expected trading environment and partly the "DVA" adjustments that we do not view as fundamental), but our outlook for 2011 and 2012 was largely unchanged,” Oppenheimer writes. “The key features of the quarter should be continuing improvement in credit quality, continued progress in loan demand turnaround (although this quarter should still be negative), strong investment banking, and a modest improvement in trading versus a lackluster 3Q10.” Morgan Stanley closed Tuesday at $26.86.