Magnitude of Trump's policies will determine future of financial stocks, analyst says

Banking on the banks

The markets haven't priced everything into Donald Trump's proposed reforms, and the magnitude of the policies will determine the future of financial stocks, an analyst told CNBC on Tuesday.

JMP Securities Financial Analyst Devin Ryan said the "devil's in the details."

"The market is baking in some profitability," Ryan said on CNBC's "Power Lunch." "I don't think it is fully expected that we are going to get everything that we want."

The financial sector has soared 15 percent since Trump was elected president on Nov. 8, on hopes of corporate tax reform and industry deregulation.

Investors are not expecting to see all of Trump's proposals go, but if they do that's "another leg up" Ryan said.

"Everything that we've heard thus far suggests that there's real change occurring, so that's important. A lot of the investors that we speak with have not been invested in financials in eight years," Ryan said.

If investors are disappointed by the incoming administration's ability to reduce corporate taxes and loosen regulations, Ryan said, it could hurt banks.

"The probability is we are going to get something — magnitude is kind of the big question," Ryan said.