MORGAN STANLEY: Equifax shares could get cut in half from here

Equifax's unprecedented data breach, which potentially exposed 143 million American's personal information last week, has already cost the credit agency $9.75 billion in market value, and the stock could plunge even more, Morgan Stanley says.

In its updated bear case out Friday, the investment bank asks, "Where's the floor?" and says Equifax's stock could plunge as low as $50 a share, about one-third of where it was before the hack.

"The main risks that we see to EFX center around: 1) greater impairment to the Global Consumer Solutions segment (GCS), 2) potential bleed into other businesses and/or share shift, 3) increased regulation, and 4) higher-than-anticipated fines," writes analyst Jeffrey Goldstein. "We note that many of these risks are difficult, if not impossible to quantify, but we give our best estimates."

Morgan Stanley maintains its equal-weight rating for the stock, and has dropped its base case price target to $127 from $140.

Regulation is a key concern for investors, the bank says. Senator Elizabeth Warren said Friday she, along with 11 other Democratic senators, had launched an investigation into the breach.

"This could result in higher compliance costs at best, or nationalization of the credit bureau function at worst," Goldstein says. "We believe that the sharp price decline over the past few days is related to the steady drumbeat of legislative inquiries,and a lack of clarity on what this means for EFX's future business model. The ultra-bear case that we have heard is that the government could decide to takeover the function of the credit bureaus."

Shares of Equifax continued their losses Friday afternoon, trading down 5% at 2:15 p.m. ET. They have plunged more than 35% since the breach was announced.