JPMorgan expects "traditional banking growth and improvement in asset quality" in the euro zone thanks to an increase in gross domestic product of 1 percent this year, compared to a contraction of 0.4 percent last year, and the likelihood that there will be no interest rate increases - especially in southern Europe.
UBS - the world's largest private bank by its assets under management, according to management consultant Scorpio Partnership - came in top of JPMorgan's European and global picks. The Swiss bank remains the best capitalized wholesale bank, according to JPMorgan, with a series of valuation metrics all pointing to a buy.
(Read More: UBS profit beats but hurt by new capital demands)
"We believe the recent underperformance of UBS provides an attractive entry point to investors," Abouhossein said.
UBS reported its last quarterly profits back in October which came in slightly above expectations. Its third-quarter net profit of 577 million Swiss francs ($644.2 million) beat estimates of 537 million Swiss francs. UBS also said in its earnings report that it had been asked to hold 50 percent more capital by its Swiss banking regulator because of "known or unknown litigation, compliance and other operational risk matters". This caused it to push back its profitability target for shareholders of 15 percent by a year to 2016.