Knight On the Brink: Financial Loser

Morgan Stanley is typically among the more volatile financial names on days of major developments, or non-developments, out of Europe. The company reported sovereign and non-sovereign net exposure to "Euro Peripherals," including Greece, Ireland, Italy, Spain, and Portugal, of $4.2 billion as of June 30, with another $1.4 billion in exposure to France.

Atlantic Equities analyst Richard Staite said on July 20, after Morgan Stanley announced its disappointing second-quarter results, that "Morgan Stanley is planning to cut risk weighted assets within its fixed income, currency and commodities trading division," and that "the near term impact will be to further reduce earnings but will not immediately lead to a liberation of capital that can be returned to shareholders."

Staite rates Morgan Stanley "Underperform," with a $15 price target, and estimates the company will earn 63 this year, followed by 2013 EPS of $1.56.

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