Banks such as Morgan Stanley (MS) and Goldman Sachs (GS) reported their quarterly earnings Tuesday morning, with mixed results. Many on Wall Street often turn to banks as a sign of things to come for the year. What can investors learn from these reports? Chris McGratty, KBW Head of U.S. Bank Research, joins Yahoo Finance to discuss the recent mixed earnings reports from banks and his outlook for the year. When asked about pricing of bank stocks in current market, McGratty claims: "They're cheap. Banks are always cheap. In my 20-year career they've always been cheap because of the value aspect of the business, the regulation. What's interesting is the speed at which the market re-rated this group. We went from 8 to 9 times earnings to 11 to 12 pretty instantaneously, when the Fed [did] the pivot in December. What we think is fair value for the group right now is around 10, 11 times and there's work we've done with where level of interest rates are in the multiple. We had a big run into the year. It's not surprising we've seen the air come out of it." For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live. Editor's note: This article was written by Nicholas Jacobino

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