Keefe Bruyette analyst Brian Kleinhanzl upgraded Goldman Sachs (GS) to Outperform from Market Perform and raised his price target for the shares to $260 from $225.

The analyst, who also upgraded Citi (C) and Bank of America (BAC) today to Outperform, raised the Universal Bank group to Overweight from Market Weight as he believes the economic cycle will be extended following rate cuts from the Federal Reserve.

Further, the current valuations for the group are attractive "as we are not as late-cycle as feared," Kleinhanzl tells investors in a research note. He also expects rotation back to financial stocks after investors have reduced allocations to the group.

Investors should position for better macro conditions with a focus on owning money center banks and select brokers, says Kleinhanzl.