Updated from 3:24 p.m. EDT

Financial stocks finished mixed Friday after several analyst updates of bank shares, including an upgrade of

Morgan Stanley

(MS) - Get Report

.

Keefe, Bruyette & Woods transferred coverage of Morgan Stanley to analyst Robert Lee, who updated the stock to outperform from market perform. Lee upped his 2009 and 2010 estimates to $1 and $3.30 a share from $1.45 and $2.90, respectively, and he established a preliminary 2011 estimate of $3.75 a share. Lee also raised his price target for Morgan shares to $35 from $28.

"Morgan is positioned to leverage recent improvements in the operating environment although a reduced risk profile and continued overhang from legacy real estate investments, among other things, place some ceiling on the near-term benefit," Lee wrote in his research note.

KBW's coverage of

Goldman Sachs

(GS) - Get Report

was also transferred to Lee, who maintained a rating of market perform. Lee raised his price target for Goldman to $166 a share from $130. Lee also increased his 2009 and 2010 estimates to $13.53 and $14.85 a share from $9.69 and $10.35 a share, respectively. He also established a preliminary 2011 estimate of $16.35 a share.

"In our view,

first-quarter results demonstrated the resiliency of Goldman's operating model and recent improvement in the capital markets bodes well so far for

second-quarter results," Lee wrote. "However, in light of the still-challenging economic backdrop, it remains to be seen just how sustainable recent improvements are."

Morgan Stanley closed up 3% at $30.32. Goldman, though, lost 0.1% to finish at $144.57.

Elsewhere, Fox-Pitt Kelton analyst Andrew Marquardt updated his 2009 and 2010 earnings estimates for

Bank of America

(BAC) - Get Report

, reflecting additional shares from conversion of preferred stock and lower preferred dividend. Marquardt now expects 2009 earnings of 22 cents a share, up from his previous forecast of 20 cents a share, although he now anticipates 2010 earnings of $1.18 a share, down from his previous estimate of $1.19 a share.

Marquardt did reiterate his outperform rating for BofA shares, arguing that the bank has an attractive franchise and earnings-per-share power remains strong despite dilution from capital raise, potential conversions and minimal earnings erosion from asset sales.

Meanwhile, Oppenheimer analyst Chris Kotowski said in a research note Friday that a meeting with BofA's management left him incrementally more positive on the stock.

"CEO Ken Lewis indicated that there would be 'a few more quarters of slogging through credit problems,' reserve building was a 'fact of life' in 2009, and the next two or three quarters could be 'ugly,'" Kotowski said in the report. BofA shares shed 0.3% to $11.27.

Other bank stocks overcame a sluggish start to finish Friday's session in positive territory.

Wells Fargo

(WFC) - Get Report

climbed 3%,

Citigroup

(C) - Get Report

was higher by 1.4%, and

JPMorgan Chase

(JPM) - Get Report

rose 0.7%.

JPMorgan's 0.7% gain came

after the bank reduced earnings per share reported over a five-year span ending last year by several cents each, due to accounting rule changes for treatment of unvested stock-based compensation awards.

JPMorgan said diluted earnings per share for 2008 decreased by 2 cents from what was reported to $1.35 a share, according to a Securities and Exchange Commission filing Friday. Earnings from continuing operations were lowered by 3 cents to 81 cents a share.

Earnings for year-end 2007 were lowered by 5 cents to $4.33 a share; by 4 cents to $4 a share for 2006; by 3 cents to $2.35 a share in 2005; and 3 cents to $1.52 a share in 2004, JPMorgan's filing said.

Among other weak performers, regional bank

Central Jersey Bancorp

(CJBK)

dropped 6.5% to $5.75. On Wednesday,

OceanFirst Financial

(OCFC) - Get Report

agreed to acquire the bank in an all-stock deal valued at $68.4 million, which valued Central Jersey shares at $7.12.

In other regional bank news,

Regions Financial

(RF) - Get Report

canceled a scheduled analyst presentation Friday,

prompting speculation the bank

could be near some kind of deal. Canceling formal presentations typically means that some sort of material information regarding the company is forthcoming. Regions shares shook off early losses and rose 4.2% to close at $4.19.

Among other financial stock winners,

Genworth Financial

(GNW) - Get Report

jumped 14.3% and

Synovus Financial

(SNV) - Get Report

rose 3.5%.

In other bank news,

a group of banks and money managers

will present a plan next week designed to help fend off some rules proposed by the Obama administration, according to a report in

The Wall Street Journal

.

The government has said it wants to reform trading practices in the market for over-the-counter derivatives. The banks plan to release a letter to the New York

Federal Reserve

and other U.S. and overseas regulators in coming days, according to people familiar with the matter.