Analyst Douglas Sipkin says his estimate reductions reflect a higher credit card charge-off scenario as consumer credit trends, most notably personal bankruptcies, continue to weaken. He cut his $3.00 fiscal 2003 (Nov.) earnings per share estimate to $2.90, and cut the $3.36 fiscal 2004 estimate to $3.23.
Sipkin thinks Morgan Stanley is the most diversified of all U.S. investment banks, which bodes well for the long term. However, he remains more cautious in the near term, given the company's exposure to the retail brokerage and credit card businesses. He reiterates his market perform rating, and thinks shares will continue to trade in the $33 to $36 range.