NEW YORK ( TheStreet) -- It's like Paris in the 1920's--except without the art, sex, food, wine or romance.

The run-up in perennially cheap U.S. bank stocks like Morgan Stanley ( MS), Bank of America ( BAC) and Citigroup ( C) means investors looking for value will need to look to Europe, argue Keefe Bruyette & Woods analysts in a report published Sunday.

"The large-cap U.S. banks that had been languishing below tangible book value since early 2011--C, MS and BAC--all had regained that level by last week. Many of the largest European banks have not followed suit. While there are many reasons for investors to remain concerned about Europe's banks, there are also a number of reasons why they may follow the U.S. banks to tangible book value," the report states.

While noting "the European economy remains weak, and many of the large-cap banks have less capital on a Basel 3 leverage basis than U.S. banks," KBW argues "there are a number of reasons why investors should look toward Europe."

They point to actions by Europe's central bank which they say have tamed the continent's liquidity problems. They also point to efforts by several European banks, including Deutsche Bank ( DB) and Barclays ( BCS) to raise capital in recent weeks.

Among KBW's top picks are Societe Generale ( SCGLY), at 70% of tangible book value (TBV) and Barclays and Deutsche Bank both at 80% of TBV.

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.