UBS: There is still a 20% upside potential for the valuations of U.S. mid-sized bank stocks.

The latest research report from UBS Group points out that despite concerns about a "peak in bank stocks," medium-sized bank stocks in the U.S. still have significant upside potential due to a favorable macro environment and expectations of industry consolidation. Analyst Timur Brachiller emphasized in the report that the banking industry is currently in one of the best operating environments it has seen in decades. "Although there are concerns about a 'bank peak,' we expect robust performance in the second half of the year, attractive relative value, and a resurgence of M&A activity to drive the group's valuation up by another 20%."