NEW YORK ( TheStreet) -- Saying the stock's valuation was "too attractive to ignore," FBR analyst Paul Miller on Tuesday upgraded his rating for Wells Fargo ( WFC) to "Outperform" with a price target of $31.00. Miller's target would be a 35% gain from Monday's closing price of $22.93. Wells Fargo's shares declined 9% on Monday, following last week's 9% decline. Bank of America ( BAC) led the largest U.S. banking names down, as its shares dropped 20% to close at $6.51. Miller continues to rate the nation's largest bank holding company "Outperform" with a price target of $12.00. The analyst said that Wells Fargo was replacing PNC Financial Services ( PNC) among his firm's "top picks" in the banking space, although PNC continues to be rated "Outperform" by FBR, with a $70 price target. Miller said the Wells Fargo upgrade "presumes that bank investors will flock to quality names that can best weather the adverse effect of a flattening yield curve," and that "the company's strong deposit franchise, diverse business lines, and solid mortgage origination platform position it well to sustain a healthy" net interest margin, with "77% of its funding base coming from core Deposits." A bank's net interest margin is the spread between a bank's average yield on loans and investments and its average cost for deposits and wholesale borrowings. The analyst also touted Wells Fargo's "decline in non-interest operating expenses, coupled with lower net interest income, which offset lower mortgage banking income." Factoring in "historically low mortgage interest rates and a seasonally strong third quarter," Miller expects the company to "show some strength this quarter compared to the first two quarters of this year." Wells Fargo's shares are at a low forward P/E of seven times Miller's 2012 earnings estimate of $3.25 a share. Miller also rates JPMorgan Chase ( JPM) "Outperform," with a price target of $56.00, which would be a 64% gain from Monday's closing price of $34.06. JPMorgan saw its shares drop 9% Monday, after last week's 7% decline.