For targeted Europe financial exposure, investors can take a look at the iShares MSCI Europe Financials ETF (NYSEArca: EUFN). However, the ETF does not hedge against currency risks. EUFN has a 13.1 price-to-earnings ratio and a 1.0 price-to-book. In comparison, the S&P 500 index shows a 17.7 P/E and a 2.5 P/B.

Banks should “benefit from an upturn in domestic macro news flow and ongoing ECB policy initiatives,” the analysts added.

Christian Gattiker, chief strategist and head of research at Swiss private bank Julius Baer, also shares a similarly optimistic view on the European financial ahead after the European Central Bank’s stress tests. [Stress Test Shines a Light on Europe Financials ETF]

“The ECB’s recently-concluded Asset Quality Review has demonstrated that the worst is over from that respect and banks should now have the confidence to return to lending,” Gattiker said in the WSJ article. “We would expect European banks to emulate the recovery already seen in the profitability of U.S. banks.”

For more information on Europe, visit our Europe category.

Max Chen contributed to this article.