The rally in most of the major banks stocks since the November 8, 2016 presidential election has been almost unprecedented. If a rally has taken place this fast it would only be the rally off the v-bottom lows of the great recession in March of 2009. While this is highly unusual, some analysts still see upside in the bank stocks ahead.

Oppenheimer’s Chris Kotowski and team of analysts see continued upside for the banks in 2017. Despite the banks looking more fully valued, Oppenheimer’s view is that 2017 to 2018 could be Goldilocks years for those banks.

In the call, three major banks saw their targets raised handily along with reiterating their Outperform ratings. Other targets were raised or ratings were given bumps as well. The firm said that its favorite names remain BofA, Citi, CIT and Goldman Sachs.

Bank of America Corp. (NYSE: BAC) saw its price target raised to $25 from $19 in the call. BofA’s most recent share price was down 1.8% at $22.67, but that is after a massive post-election run. Bank of America shares have a consensus target from Thomson Reuters of $20.88.

Citigroup, Inc. (NYSE: C) was rated as Outperform and its price target at Oppenheimer was raised to $72 from $65 in the call. Citigroup was last seen trading down 1% at $59.42 and it has a 52-week high of $60.80. The Thomson Reuters consensus analyst price target is $59.74 for Citi shares.

Goldman Sachs Group Inc. (NYSE: GS), which is one of the stocks that has to help propel the Dow to 22,000 in 2017, saw its price target raised to $252 from $228 and Oppenheimer has an Outperform rating. Goldman Sachs has a 52-week high of $242.81 and a consensus analyst target of $213.54. Its shares were last seen trading down 1.5% at $238.24.

CIT Group Inc. (NYSE: CIT), which is far from a normal bank, was reiterated as Outperform at Oppenheimer and its price target was maintained at $50. CIT shares were last seen down 1% at $42.55 and its 52-week high is $43.45. CIT has a consensus target price of $41.54 from Thomson Reuters and this matches the highest official analyst price target.

Oppenheimer’s bank research report said:

The great credit scare in January and February was a world-class buying opportunity in bank stocks. From the bottom on February 10 to Election Day, the bank index was up 33% and beat the S&P by a whopping 12%… Since Election Day bank stocks have outperformed by another 12%, lifting their relative P/E from ~60% at the low point in February to ~77% now.

Obviously one cannot remain as bullish on the group as when the stocks were cheap, and if one was overweight going into the election it would be hard not to take any gains off the table, but on balance we would let the bet ride and maintain a somewhat overweight stance. We say 2017-18 might be “Goldilocks” years because credit costs are likely to remain low, expenses have been tamped down and will likely stay that way, but revenues seem poised to get a lift. The stocks are no longer cheap, but not expensive either.

While ‘Perform’ ratings were maintained for these three banks, their earnings estimates for 2016, 2017 and 2018 were raised for JPMorgan Chase, Morgan Stanley and Wells Fargo.

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