Shares of JPMorgan Chase & Co. (JPM) are trading up about 0.5% Tuesday afternoon at $112.31 per share after a team of bulls on the Street issued a research note in which they highlighted the stock's recent sell-off as a buying opportunity. (See also: Next Bitcoin Bull Run to Occur in 2 Weeks: Pantera.

In a note to clients Monday, Analysts at Keefe, Bruyette & Woods lifted their rating on shares of the Wall Street bank from market perform to outperform. KBW's Brian Kleinhanzl initiated a 12-month price target at $127, reflecting an approximate 13% upside from the current price. As shares of JPM were trading down about 5% from highs reached at the end of January through Monday, the analyst indicated that the stock's valuation is cheap alongside its strong fundamentals

"We believe the recent selloff in shares of JPM has created an opportunity for investors to move up the quality spectrum and add a best-in-class bank at a reasonable valuation," wrote Kleinhanzl. "We believe the market is pricing in a scenario for bank stocks, and JPM, that is overly pessimistic given our expectations for the macro environment near term.”

KBW: Solid Outlook for JPM

The KBW analyst wrote that JPM is valued at about 11.3 times his 2019 earnings per share (EPS) estimate, compared to the median large-cap bank stock at 10.9 times. 

"The fundamental outlook for JPM is still solid and higher volatility and higher rates could result in an upward bias to forward earnings barring a dramatic change in deposit betas, loan growth, or credit conditions," wrote Kleinhanzl.

Earlier this week, analysts at Goldman Sachs issued a note recommending buying cyclical sectors, particularly financials, as fears over rising interest rates and inflation spark heightened volatility. The bank highlighted "oversold" names such as Citigroup Inc. (C), whose lower labor costs should hedge again accelerating wages in 2018.  (See also: Buy Citi, Netflix on Rising Inflation: Goldman.)