Goldman Sachs (GS), Morgan Stanley (MS), Bank of America (BAC) and Citigroup (C) were downgraded as rising valuations make large-cap bank stocks less compelling, prompting a shift toward alternative asset managers, Oppenheimer said Tuesday in a report.

Commercial and investment banks remain on solid growth paths, with no near-term catalysts expected to disrupt earnings, the report said. Even so, Oppenheimer noted that valuations have already moved to the upper end of historical ranges for commercial banks and well above average for investment banks, leaving less room for upside despite strong credit conditions, robust trading activity and a buoyant investment-banking cycle.

Oppenheimer recommended investors rotate out of large-cap bank stocks and into alternative asset managers, particularly Ares Management (ARES), Blackstone (BX) and KKR (KKR), where it sees more attractive entry points.

Oppenheimer downgraded Goldman and Morgan Stanley to underperform from perform, and cut Bank of America and Citigroup to perform from outperform.

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