Adds shares, comments from Morgan Stanley and Macquarie

** Bendigo and Adelaide Bank BEN.AX extends losses, falls as much as 3.2% to A$11.27, lowest since May 2

** Citi says BEN's Q1 results are likely tough for the markets to digest

** Co posts Q1 unaudited cash earnings of A$120.7 million ($78.43 million), ~6% below the H1 run-rate implied by consensus; posts ~7% rise is costs

** While the market is coming to understand quarterly seasonality of BEN’s P&L, costs are higher than consensus expectations - Citi

** Citi says market will have to be patient on the details of cost relief and productivity until co's strategy day in December

** Morgan Stanley cuts rating to "Underweight" from "Equal-weight", trims PT to A$10.00 from A$10.60

** MS says it will take longer to restore investor confidence in the earnings outlook as BEN tries to manage margins and costs, while trying to transform its business

** Macquarie analysts also cut PT to A$10.50 from A$10.75, highlighting ongoing revenues and cost pressures

** As of last close, stock down 11.1% YTD

(Reporting by Himanshi Akhand in Bengaluru)

((Himanshi.Akhand@thomsonreuters.com;))