NEW YORK (TheStreet) -- Morgan Stanley (MS) was the loser among the largest U.S. financial names on Monday, with shares sliding 5% to close at $13.49, as both the Greek prime minister and finance minister threw an ailment monkey wrench into Europe's debt crisis.
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The government of Cyprus announced a formal request for top European officials for bailout funds, because of the island nation's "large exposure in the Greek economy," just hours after Spain formalized its request for 100 billion euro in assistance for its banking sector from the European Financial Stability Facility. Meanwhile, Greece's finance minister Vassilis Rapanos resigned because of health concerns, according to several reports.
European leaders will meet later this week to negotiate a plan to stabilize the region.The KBW Bank Index (I:BKX) declined 3% to close at 43.89, with all 24 index components showing declines. Morgan Stanley's shares have now declined 10% year-to-date, following a 44% decline during 2011. The shares for less than half of their reported March 31 tangible book value of $27.37, and for six times the consensus 2013 earnings estimate of $2.24 a share, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $1.38. Oppenheimer analyst Chris Kotowski on Monday reiterated his "Outperform" rating and $28 price target for Morgan Stanley, while lowering his 2012 EPS estimate to $1.23 from $1.61 and his 2013 estimate to $$2.51 from $2.70, saying the company was among the "hardest hit by our estimate reductions because they don't have a commercial bank to offset the weakness in investment banking," and that his firm had taken its second-quarter "our investment banking fee revenue assumption down from $1.3B to $1.0B," while also cutting its estimated "principal transactions revenue from $3.4B to $2.6B." Please see TheStreet's 8 Post-Downgrade Bank Stock Bargains for much more detail on Morgan Stanley and other large U.S. bank holding companies trading below tangible book value. Interested in more on Morgan Stanley? See TheStreet Ratings' report card for this stock.
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