Analyst Matt O’Connor wrote in a note to investors that he is taking a “more cautious view” on banks.
"As we look to 2020, after the sharp rally, we think a lot of good news is priced into bank stocks and the broader market," he wrote. "Given our more cautious outlook on bank stocks, we prefer stocks that should be more defensive against a low or negative return backdrop."
Separately, Wells Fargo analyst Mike Mayo wrote that "long-term, this decade should be the golden age of technology for banks."
"The result should be record efficiency, more annuity-like outcomes, and rerating of stocks as higher P/E and 'low vol,'" he wrote.
Mayo said that he has an ongoing "Goliath is Winning” theme, and that his top three picks -- Citigroup, Bank of America (BAC) - Get Report, and JP Morgan Chase (JPM) - Get Report were the top three performers out of the top 40 banks in 2019.
"The largest banks have shown better operating leverage than the industry for the past three years and should continue to do so for the next three years," he said.
"Tech is a key driver, and should continue to help as large banks harvest investments in talent and systems and begin to sunset legacy systems."
Mayo said that expense control at the largest banks "should be superior, especially as banks move along the `J curve' for tech investments."
"Second, while large banks are now able to offset spending on new technology with savings from past tech projects, smaller banks are still ramping technology spending."
Finally, Mayo said that while he projected net interest income to be flat over three years, "large banks should be able to better manage this environment by having more diversified revenues and fee growth."
At last check: Citi shares eased 0.8%, Morgan Stanley declined 1.1%, Huntington fell 1.7%, Bank of America slipped 0.5% and JP Morgan Chase was off 0.8%.