NEW YORK (TheStreet) -- Shares of JPMorgan (JPM) are rising 0.71% to $68.47 on Tuesday after analysts at Bernstein today predicted a bull market for U.S. bank stocks, picking the commercial investment banking institution as one of its two best companies, according to The Wall Street Journal.
The firm cited three key points for its bullish outlook.
First, rising rates are beneficial for bank stocks, as banks will "hold up well given market expectations regarding their asset sensitivity." Second, unlike rival sectors, banks are still trailing their average profitability levels. Third, bank valuations are in line with historical averages, currently trading at 12.4x forward earnings, compared to a historical median of 12.2x, the firm noted.
Along with JPMorgan, Citigroup (C) was one of Bernstein's two best picks, thanks to a combination of low valuations, trading exposure and dividend yields.
Shares of Citigroup are gaining 0.44% to $56.90 on Tuesday.
Separately, TheStreet Ratings team rates JPMORGAN CHASE & CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate JPMORGAN CHASE & CO (JPM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, increase in net income and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."