NEW YORK (TheStreet) -- Shares of Bank of America Corp. (BAC) continue to fall this afternoon following the bank's announcement earlier today that it would suspend stock repurchases, a dividend increase and resubmit a capital plan, after it uncovered an incorrect accounting adjustment.
The stock is down -6.30% to $14.94.
Morgan Stanley (MS) analysts today said the bank should retain its dividend increase but not continue its repurchase plan, the Wall Street Journal reports.
Analysts say the market reaction is overdone. Investors are taking into account that stock buybacks will be eliminated through 2016, according to Morgan Stanley.
It was positive that the error was found internally through the CFO group after a review of the 10-Q filing, which was better than the mistake being brought to their attention by a third party or the Fed. The hit to earnings per share will be about 1.3%, according to the report.
Morgan Stanley analysts lowered their 2015 earnings per share estimate by 2 cents to $1.79 on higher share count, but the adjustment had no impact to their 2014 EPS estimate, the Journal noted.
The company said it will review its financial accounts and plans to request a capital action plan that is less than its previously announced 2014 plan.