Wall Street's three-year lean season is over, if new research from one of the industry's major players can be believed.

J.P. Morgan

Tuesday upgraded shares of investment banks

Goldman Sachs

(GS) - Get Report

and

Morgan Stanley

( MWD) on grounds the global economy is improving and will lift stock markets and pave the way for more underwriting and mergers business.

Goldman, which at Monday night's close of $94.92 trades about $3 below its 52-week high, was upgraded to over-weight from neutral. Morgan Stanley was moved to neutral from underweight.

"Similar to other investment banks, Goldman has taken significant costs out of its underwriting platform, which should translate into operating leverage as the revenue environment improves," J.P. Morgan wrote. "We believe this leveraged coupled with the improving equity and M&A environment will enable Goldman to deliver healthy EPS growth over the next few years."

The analysts noted that Goldman is currently trading at about 2.2 times book value, a discount to its historic book multiple of 2.8. "As the operating environment improves, we believe Goldman will begin generating a return on equity north of 20%, resulting in an expansion of its price-to-book multiple," they wrote.

While praising the sector's economic prospects, J.P. Morgan was less sanguine on asset managers including

T. Rowe Price

(TROW) - Get Report

, which it dropped to neutral from over-weight.

"While T. Rowe Price has attractive attributes, in our view, such as a diverse product offering, ties to the retirement market, and a strong performance track record ... we believe most of the brokers in our universe will outperform it and other asset managers we cover on a relative basis," the analysts wrote.

T. Rowe Price's shares closed Monday at $42.01, about 80 cents below its 52-week high. J.P. Morgan also lowered

Lehman

( LEH) to neutral from over-weight.