NEW YORK (
) -- Goldman Sachs' European equities research team recently added three banks as recommendations to a sector list the strategists argue will benefit from improving creditworthiness in the "peripheral Eurozone," a term used to refer to Portugal, Ireland, Italy, Greece and Spain.
Goldman's strategists further argue banks are "one of the least expensive sectors in the market and the trade-off between their growth prospects and earnings in the next few years looks especially attractive," according to a Feb. 3 report.
Goldman already had a positive view on global European banks, but was more bearish on domestic retail banks, especially in the periphery.
"We believed that the global banks (large by market cap) were better positioned in terms of balance sheet strength and also had diversified revenue streams that enhanced the prospects for loan growth. In general, domestic retail banks, meanwhile, have weaker balance sheets and faced mature end markets that were de-leveraging," the report states.
In the U.S., Goldman's bank analysts recommend
(C - Get Report)
(JPM - Get Report)
East West Bancorp
when it comes to
regional bank stocks
As for Goldman's European analysts, they already had buy ratings on several stocks, including Swiss bank
, and Belgian-based lender
. They also had conviction buys on
in Austria, France's
, and U.K.-based
Lloyds Banking Group
(LYG - Get Report)
However, they suspended ratings and price targets on
Allied Irish Banks
Bank of Ireland
citing "limited visibility over the banks' fundamentals, pending reforms of the financial sector and macro recovery outlook."
Goldman's European bank analysts also got more bullish on three stocks in a sector outlook published at the start of the month. Here are those stocks.