Strategas Research Partners said bank stocks have further room to run even after the big post-election rally in the shares.
The research firm, which reiterated its overweight rating on the sector this week, cited data showing financial stocks undervalued relative to the amount of earnings they contribute to the economy.
In another move, Strategas reaffirmed a market weight rating for energy stocks due to weak profitability relative to their market value.
"Despite the major move in many large-cap financials, we find it hard to find enthusiastic bulls on the sector in our travels. This is especially true among hedge funds," strategist Jason Trennert wrote in a note to clients Monday. "Although a somewhat crude measure of investor enthusiasm, the difference between the earnings weight in the index and its market-cap contribution can be somewhat telling."
The Financial Select Sector SPDR Fund is up 17 percent since the Nov. 8 election through Tuesday.