Time to buy JPMorgan Chase

The uncertain market environment created by the European Sovereign debt contagion and Congress dragging its feet on regulatory reform is driving stock prices down to levels that analysts are finding too hard to resist.

"At today’s compressed valuations, we think (as difficult as it feels) that you’re supposed to step and buy the quality names in the group and JPMorgan Chase ( NYSE:JPM ) is as good as it gets,” wrote Glenn Schorr, an analyst for UBS who has had a ‘neutral’ rating on the stock since April 2005. “Bottom line, we like the risk-reward of JPMorgan Chase Shares at roughly eight times our 2011 EPS estimate or below 1 times current book (value)."

JPMorgan climbed more than 1 percent as stocks rebounded from a selloff yesterday that started the month of June. After a stock market correction that nearly reached as much as 15 percent since the S&P 500’s 2010 high reached in late April, analysts are increasingly upgrading stocks based on valuations that they feel are discounting the worst case scenario for the global economy. Last week, .

"I love the call and JPMorgan is even cheaper versus 2012 earnings," said Karen Finerman, President of Metropolitan Capital Advisors and a ‘Fast Money’ trader. According to Schorr’s figures, JPMorgan currently has a price-earnings ratio of seven, based on 2012 estimates. Its average PE over the last five years has been 15.

Financial stocks have been among the hardest hit during the stock market’s correction, with JPMorgan down 13 percent since late April. Investors fear a double whammy of bad European debt locking up credit markets and financial regulatory reform snuffing out profitability banks such as JPMorgan and Goldman Sachs generate from securities trading.

Not all investors are stepping in right now. After stocks posted their worst May since the 1940s, fear is clearly playing a bigger role right now than fundamentals. It’s one of the most difficult periods to try and time the market ever, many veteran traders have said.

"I like JPMorgan too, but the analyst is playing the stock market," said Guy Adami, managing director for Drakon Capital and a former head gold trader at Goldman Sachs. "That can be dangerous."

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John Melloy is the Executive Producer of Fast Money. Before joining CNBC, he was an editor for Bloomberg News, overseeing the U.S. Stock Market coverage team.