By Duff McDonald
November 16, 2011

FORTUNE — Woe is the investor who has tried to pick a bottom in U.S. financial stocks at any time in the past few years. Unless their timing has been dead-on, they have surely gotten burned by one or more instances when the industry’s stocks have cratered on some new fear. The current bogeyman? Italy, of course. Raising the ironic point that it is none other than Silvio Berlusconi — he of Bunga Bunga and Ruby Heartbreak — that has ruined the party. Wasn’t that all the man was good for? Parties?

But let’s be serious here, folks. I had a chance to speak with Michael Poulos, head of the U.S. financial institutions business at consultant Oliver Wyman last week. While he’s no investment advisor — rather, he’s a management consultant — he thinks investors are overlooking real opportunities right here at home in the face of ever-shifting headline risk.

“North American banks (U.S. and Canada) are the only ones that are truly stabilized at this point,” says Poulos. “They took their medicine. They took massive write-downs for all of their credit positions and recapitalized the system via TARP. At that point, the equity market opened up to them again, and they repaid TARP with private capital. European banks have been less ruthless in taking write downs and are holding less capital. The U.S. crisis centered on private borrowers and mortgage collateral, especially in subprime segments. The current crisis in Europe is about sovereign debt, which is a much more fundamental crisis. It is challenging the whole premise of modern banking that sovereign debt should be the rock-solid foundation of banks’ asset books, and that too-big-to-fail banks will have credible sovereign guarantors.”

So there’s no surprise upside to European financial services equities? Or bonds? “Admittedly, Italian bond yields going over 7% is pretty terrifying,” says Poulos, “and the political situation is very difficult. But people have thought through the parameters of the issues. They have sized banks’ exposures. They know which economies can sustain their debt burden and which cannot. But the Continent as a whole does have the resources to muddle through, so I believe that is the most likely scenario.”

Of course, anyone paying attention to commodity prices of late might think it a better idea to look to countries with significant exposure to such. Scotiabank Group forecasts real GDP growth for 2012 in Brazil, Chile, and Peru at 4.0%, 4.8%, and 5.6%, respectively. Australia? A still-solid 3.0%. That compares to just 1.7% for the U.S.

Poulos is unmoved. “Economies exposed to commodities are getting credit for being geniuses these days,” he says, “but there are two ways that whole party could get disrupted. One is a slowdown in China. The other is a deflation of the commodities bubble. The first could precipitate the second, and if demand for commodities shrinks even a little, the speculative fervor could go away.” Poulos has similar skepticism about the whole idea that the next decade is one in which emerging markets will shine brighter than their struggling counterparts in Europe and North America. “To this point, emerging markets have been relatively unscathed by the global crisis,” he admits. “But I think people are suffering from a fallacy of extrapolation, that these markets can grow forever at 10%, that the developed world will be less relevant in the next decade. Here’s why that’s wrong: At the end of the day, the U.S., in particular, has a lot going for it. It’s a safe haven, it has very basic advantages around deep and liquid capital markets, constitutionalism and the word of law, and a big economy relative to its financial services sector.”

While we’re all for buying when sentiment is lousy and valuations attractive, there’s an argument to be made that U.S. bank stocks are not attractively priced — that they’re priced for a new reality. It was Poulos himself who sent me a presentation he’s been making to clients that makes a very definitive case that the “Golden Era” of banking is over, perhaps permanently. The title of one slide: “The US macro environment is uncertain.” Details from another: the worst case scenario for the U.S. is economic stagnation. Hardly cause for joy.

Fine, he says, but that doesn’t mean things can’t get better from here. “For U.S. financial institutions right now, the profit forecasts are pretty bleak,” he admits. “It’s bad for banks to have zero interest rates and no loan growth. But there’s a light at the end of this tunnel. All of the policy levers available — such as tax policy and increased non-financial regulation — are being pulled in an anti-growth direction. All we have to do is stop doing that. Even with those headwinds, the economy is still growing at 2.5% a year. If we stop doing that stuff, I don’t see why we can’t grow at 4%. So there’s your decision as an investor: If Brazil is growing at 4%-5% and the U.S. at 4%, where do you want your money? I know where I want mine. You want to follow the crisis, not be ahead of it. The bargains are in the U.S. right now.”

Poulos is not alone in his bullishness on American banks. The folks over at RBC Capital Markets think valuations will rise from here, if not uniformly so. “Investors should look to buy selective bank stocks in anticipation that their valuations return to normalcy over the next two years which we believe could result in potential appreciation for many of the top 20 [U.S.] banks in excess of 100%,” they wrote in an October 26 report. Their favorite of the 20: PNC Financial Services Group (PNC).

And they’re not alone in seeing such upside. JPMorgan Chase (JPM) is trading for just $33. The median analyst price target, according to Thomson ONE Analytics? $47. That’s 42% upside. Even beleaguered Bank of America (BAC), which on most days seems to have more troubles than most European governments, has a median price target of $9, 50% above its current price of $6 a share. Likewise Goldman Sachs (GS). It’s trading for $100, but has a median price target of $140.50 — again, more than 40% upside.

Last Friday, Bernstein analyst Brad Hintz released an update on his thinking on Morgan Stanley (MS), which he rates an Outperform. That stock traded for $35.74 in October 2009. It’s now at $16. Hintz has a price target of $28, which represents 69% upside.

Sure, we’ve all learned to take analyst price targets with the appropriate grain of salt. And if you don’t think things are going to be as good for financials as they were in 2008 or 2009 any time soon, you’re probably right. You might even think there are more hidden dangers in these stocks, particularly in light of the blow-up of MF Global. And you might be right about that, too. But you might be wrong. Europe could sort itself out, the U.S. economy could muddle through, and Italy will finally have a serious leader once again. In that event, you’re going to leave a lot of money sitting on that table.

Full disclosure: I currently own shares in Bank of America, JPMorgan Chase, and Morgan Stanley. I made money last time I bought and sold them in the span of a week. I am currently down on all three this second kick at the can.

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