Goldman may post a huge loss of $5.14 a share for the quarter, while Morgan Stanley is likely to report a loss of 46 cents a share, analyst Kenneth Worthington said.

Worthington was the latest among Wall Street analysts to turn more downbeat on Goldman Sachs and Morgan Stanley.

For the quarter, he expects gross write-downs of about $3.5 billion at Goldman Sachs and about $5.5 billion at Morgan Stanley.

Morgan Stanley, however, will benefit by about $4 billion due to the spread widening on its own debt, he said. This is more than the $0.5 billion benefit the analyst expects at Goldman.

Goldman has been widely expected to post its first quarterly loss since going public in 1999. Poor market conditions got even worse last month as the US Treasury abandoned its proposal to buy hard-to-trade mortgage securities and other debt from hard-hit banks.

In spite of the tough operating environment, the analyst said he expects Goldman to outperform in the longer term due to "a superior culture and ability to alter its business mix."

Goldman has numerous attractive investment opportunities including various distressed and underpriced assets, he said.

Worthington said he expects Goldman to use any 'bank' acquisition to build high net worth or commercial relationships.

"We expect both GS and MS to be opportunistic in growing their deposit franchises," he said.

Worthington said he continues to recommend overweight-rated Goldman for exposure to the sector even though Morgan Stanley could be a better stock ahead of the fourth-quarter results. He rates Morgan Stanley "neutral."

Worthington widened his fourth-quarter loss estimate on Goldman to $5.14 per share from 58 cents a share. He forecast a loss of 46 cents a share for Morgan Stanley, compared with his previous view of a profit of 28 cents per share.

Analysts including UBS' Glenn Schorr and Credit Suisse's Susan Roth Katzke have lowered their earnings forecasts for Goldman and Morgan Stanley recently.