"We are lowering our third-quarter estimates to reflect the difficult operating environment, characterized by lower client-related trading volumes and losses on hard-to-sell assets," analyst Prashant Bhatia wrote in a note to clients.

Bhatia expects Lehman to take fresh asset-related writedowns of $2.9 billion. He expects $1.8 billion in writedowns at Goldman and $1.7 billion at Morgan Stanley.

The analyst, however, said he saw a "lower probability" that Lehman would sell its Neuberger Berman business or raise capital in the near term.

Several Wall Street analysts have been speculating a possible sale of all or a portion of Lehman's asset-management business -- a move mentioned in media reports as a possibility for weeks.

Experts estimate the business, whose core is Neuberger Berman, could be worth about $8 billion.

"Even under the potentially more stringent rating-agency guidelines related to the amount of preferred securities in the capital mix, we anticipate that Lehman can absorb over $3 billion of after-tax losses without adding more common equity," Bhatia said.

The analyst widened his third-quarter loss estimate for Lehman to $3.25 a share from 41 cents a share.

He cut his third-quarter earnings estimates for Goldman to $2.50 a share from $4.50, and for Morgan Stanley to 75 cents a share from 76 cents.

Bhatia rates Lehman and Morgan Stanley "buy," and Goldman "hold."

He cut his price target on the shares of Lehman to $35 from $50. Shares of Lehman closed at $13.73 Wednesday on the New York Stock Exchange, while those of Goldman closed at $158.25 and Morgan Stanley at $37.40.

(Reporting by Tenzin Pema in Bangalore; Editing by Vinu Pilakkott)