Jessica Rinaldi/Reuters James Gorman has been trying to turn around Morgan Stanley since he became chief in 2010.

A year and a half into a campaign to rebuild Morgan Stanley, some shareholders are losing patience with James P. Gorman, the firm’s chief executive.

Despite a flurry of management changes and a big hiring spree to bolster its trading business, a big Wall Street money maker, the company’s stock price is lower than when Mr. Gorman took over in early 2010. Analysts have been cutting their earnings forecasts for Morgan Stanley’s first-quarter results, which the company is scheduled to report next week. On Tuesday, Goldman Sachs chimed in, cutting sharply its estimates for the bank.

“You can only take so much pain,” said David P. Foley, an investment manager at Estabrook Capital Management, which as of Dec. 31 owned roughly 661,000 shares in Morgan Stanley, valued at almost $18 million. “We have to go to our clients and defend the stock, and invariably someone says, ‘Why do you still own this thing?’ Eventually, I am sure Morgan Stanley will turn around, but the firm has become harder and harder to defend because it still hasn’t turned the corner.”

Mr. Gorman has been working to turn that corner for Morgan Stanley, a one-time Wall Street powerhouse that was almost brought to its knees in the 2008 financial crisis. Yet the company continues to be hobbled by one-time legacy items, and the stock price has fallen more than 9 percent since Mr. Gorman took over. In 2010, Morgan Stanley produced a return on equity, a closely watched measure of financial performance on Wall Street, of 8.5 percent, down from 23.5 percent in 2006. In 2009, return on equity was 5 percent. In contrast, Goldman produced a 2010 return on equity of 11.5 percent and its stock has fallen roughly 4.5 percent since early 2010.

And analysts are expecting Morgan Stanley to report a decline in its first-quarter results. The consensus, according to a survey by Thomson Reuters, is that Morgan will earn 37 cents a share in the first quarter ended March 31, down from 99 cents a share in the quarter a year ago.

Analysts expect the first quarter to include a handful of one-off charges, including the impact of a major embarrassment for the firm. Mitsubishi UFJ Morgan Stanley Securities, a unit that Morgan Stanley created with the Mitsubishi UFJ Financial Group but that it does not control, may post a fiscal year loss of $960 million, a recent report in the Nikkei newspaper of Japan said.

Morgan Stanley owns 40 percent of the venture, and its share of this loss will be reflected in its first-quarter results. The company declined to comment on the Nikkei report.

James Mitchell, an analyst with the Buckingham Research Group, estimates that the losses will result in an after-tax reduction in Morgan Stanley’s net income of $290 million, or 20 cents a share. Keith Horowitz at Citigroup estimates that the impact on Morgan’s earnings will be as high as $385 million.

Morgan Stanley’s relationship with Mitsubishi was struck in the darkest days of the financial crisis, when the company accepted a $9 billion lifeline from the Japanese bank. The investment was similar to the one the billionaire investor Warren E. Buffett made in Goldman Sachs. Morgan Stanley also set up two joint ventures with Mitsubishi to increase its presence in Japan.

But unlike Goldman, which recently announced plans to pay back Mr. Buffett, Morgan Stanley still has expensive ties to Mitsubishi. In addition to the joint-venture losses, its dividend payments to Mitsubishi on the $9 billion investment total roughly $220 million a quarter, or almost $900 million a year.

Getting out of this investment has proved more difficult than many executives at Morgan Stanley initially thought. The dividend payments will continue until the two parties can come to an agreement to end them or until the stock trades above $37.875 for 20 days out of 30 consecutive trading days. For this to happen, Morgan’s stock would have to increase 41 percent.

As a result, Mr. Gorman is keenly focused on the company’s stock price, employees say. At an internal meeting in January, workers disappointed that their compensation was down confronted Mr. Gorman, according to employees who attended the session but were not authorized to speak on the record. Mr. Gorman told them he had to show restraint on expenses because he was focused on lifting the share price above $38 to free Morgan Stanley from the Mitsubishi investment.

Morgan Stanley declined to comment for this article.

Mr. Gorman has had just 16 months to turn things around — and he has been hampered by decisions made by previous chief executives that still weigh on the company. He also faces the same challenging markets that have vexed his rivals.

At the same time, he has made some progress, hiring a number of crucial managers and traders and bolstering the performance of the bank’s equity department. Facing pressure from shareholders, he reduced the company’s compensation ratio — the percentage of revenue that goes to compensation — in 2010. While still high compared with most competitors’, it was 51 percent in 2010, down from 62 percent in 2009.

Mr. Gorman has told investors that fixing Morgan’s fixed-income department is his No. 1 priority, and he recently named a longtime Morgan Stanley executive, Ken deRegt, to run the division.

But fixes will not come easily. The fixed-income, currency and commodities division lost $29 million in the fourth quarter. Trading activity has not fully recovered from the financial crisis.

Structured products like mortgage securitizations are not the profit centers they once were. Morgan Stanley was more focused than many competitors on structured products. At the same time, it was less focused on grabbing client activity, making a comeback even more difficult.

In 2006, Morgan Stanley produced revenue of $9.58 billion in fixed-income sales and trading. In 2010, revenue from this division came in at $5.8 billion. In contrast, Goldman produced $13.7 billion in fixed-income trading revenue in 2010, down from $14.26 billion in 2006.

To turn around the fortunes of its fixed-income department, Morgan needs a great amount of capital. This is a capital-intensive business; all companies are required by regulators to put up considerable capital to support trading operations, and Morgan has a lot of it sitting there that it cannot put to work elsewhere.

And other draws on Morgan Stanley’s capital are just around the corner. During the financial crisis, Morgan Stanley struck a joint venture with Citigroup to merge the two companies’ retail operations. Morgan Stanley controls the venture, which employs an army of stockbrokers.

In June 2012, Morgan Stanley has the option to buy an additional 14 percent of Citigroup’s stake, which would bring its ownership to 65 percent. A year later, it can buy another 15 percent, and it can buy the remainder in the next year. It would pay “fair market value,” as determined by a third-party appraiser, according to regulatory filings.

Glenn Schorr, an analyst at Nomura, estimates it would cost Morgan Stanley $12 billion to $14 billion to buy the rest of the venture from Citigroup.

“While this was a strategic move for the company, it is a still a big call on capital over the next three years,” Mr. Schorr said.

Still, not all shareholders are throwing in the towel.

Matthew Lindenbaum, a managing partner at the hedge fund Basswood Partners, is bullish on the stock. The fund owned 423,400 shares at the end of December, most of which were recently acquired. That stake is currently valued at $11.1 million. Unlike some long-term holders, Mr. Lindenbaum estimates he has actually made some money on the stock, and he has been buying in recent months.

He says if there is no material change in the stock a year from now, he will consider selling, but for now he is sitting tight.

“I am frustrated, but you have to grow up a bit,” he said. “The actual turnout will take a few years, but the stock will move before that. It is not easy doing what Gorman is trying to do, and it takes time.”

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