This bank is 'probably the best ....I have ever followed in 5 decades'

Praise indeed.

A good start to the year is only going to get better for JP Morgan Chase , according to veteran banking analyst Dick Bove.

In the wake of fourth-quarter earnings that beat Wall Street expectations despite a weak trading environment and a writedown from tax reform legislation, Bove, of the Vertical Group, said the biggest U.S. bank is poised for big gains ahead.

In fact, he raised its price target to $128.45, a level that suggests a 14 percent gain from Tuesday's opening.

"My view of this company is that it is probably the best bank I have ever followed in 5 decades of analyzing companies," Bove told clients in a note.

Bove is keeping his "buy" rating on JP Morgan as the stock already has gained more than 5 percent in the new year. The company last week posted quarterly earnings of $1.76 a share on revenue of $25.45 billion, both well ahead of consensus estimates.

Though Bove himself, in a CNBC interview, called the results "mediocre," he sees the environment overall for banks as highly conducive to large profits and sold gains for share prices.

"It appears that in 2018 the banking industry and JP Morgan Chase will enter a new financial world which will provide this company with further opportunities to grow," he said. "In the new era, it is very possible that the valuation of JP Morgan and its industry will expand, a process that is already well underway."

Banks are being seen as big beneficiaries of the tax cuts Congress enacted in December .

In its earnings presentation, JP Morgan said its effective tax rate would be 19 percent, compared to 35 percent prior. That in itself should provide the bank a nice cushion, even though it had to take a $2.4 billion charge for 2017 because of the tax legislation.

In his note to clients, Bove reiterated his view that Q4 numbers were "not impressive." However, he still holds a positive outlook due to the bank's ability to negotiate a number of obstacles.

"Whether investors look at reported numbers (as I do) or managed numbers, quarter-over-quarter, revenues were down and expenses were up," he wrote. "Admittedly, one-time events impacted the numbers but the biggest impact was in the tax adjustment not the operating numbers."

While other banks stocks have underperformed, JP Morgan's return of about 60 percent over the past two years has about doubled the S&P 500 .

"An assessment of JPMorgan Chase in recent years indicates that this management has been wrestling with a hostile environment and yet it has been able to maintain its stability," Bove said. "The stock price is indicating that this environment is about to change meaningfully in a very favorable direction."

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