(FORTUNE Magazine) – In a soaring market, fewer and fewer stocks rate strong and unequivocal recommendations from security analysts who follow them. All the more striking, then, is the choir of analysts singing fortissimo praises for four New York banks. It is true that the shares of Citicorp, Chase Manhattan, J.P. Morgan & Co., and Chemical New York have appreciated 74% on average since late September, vs. a 34% rise for Standard & Poor's 500-stock index. But their price-earnings multiples remain mostly in tempting single digits, far below the market's recent average of 16.1. Do these banks deserve such P/Es? Most assuredly not, says James McDermott Jr., director of research at Keefe Bruyette & Woods, a brokerage firm that specializes in bank stocks. Says McDermott: ''This should be bank stock heaven.'' Interest rates are the lowest in eight years, he reasons, and this should stimulate borrowing and make it easier for troubled customers to meet payments due. But chary investors are concerned about the effect of plunging oil prices on the banks' Latin American debt and their loans to U.S. oil producers. Lawrence Cohn, a Merrill Lynch bank analyst who is bullish on the stocks, dismisses these worries. ''Energy-related loan losses should be quite limited,'' he says, because New York banks have largely confined their energy lending to big integrated oil producers in no danger of default. The four banks hold $25.5 billion in Latin American debt, equal to 6.5% of their combined assets. But Cohn believes falling oil prices will bring relief to such oil importers as Brazil and Chile, which owe U.S. banks a total of $29.7 billion. The main problem is Mexico, which derived 68% of its 1985 export earnings from oil and owes $24.4 billion to U.S. banks. Cohn is encouraged by Mexico's conciliatory tone in recent debt negotiations with American banks. The Mexican government is understood to have reduced its annual borrowing requirements drastically, to about $2 billion. Says Thomas Hanley, a bank analyst at Salomon Brothers: ''Investors may draw a deep sigh of relief from progress made in the Mexican debt renegotiations.'' Citicorp is one of Hanley's favorites, even though its huge loan portfolio bulges with $10.1 billion in Latin American loans. A big $429-million provision for bad debts and a 26% rise in expenses other than interest drove Citi's earnings per share down 7.4% in the first quarter, to $1.87 a share. But Hanley is confident that the bank's chairman, John Reed, will crack down on noninterest expenses. He expects the bank to keep adding to its loan-loss reserve to raise it from its recent 1.15% of total loans to something nearer the 1.45% average for money center banks. Reserve additions, Hanley says, should not prevent Citicorp from boosting operating earnings 15% in 1986. J.P. Morgan & Co. is the No. 1 choice of George Salem, bank analyst at Donaldson Lufkin & Jenrette. Endowed with the highest return on assets of any money center bank, Morgan recently dazzled Wall Street with a 42% increase in first-quarter earnings. Net realized gains on investments in securities, mainly bonds, jumped from $7.1 million to $58.1 million, but that was nothing compared with the bank's $866 million in unrealized investment gains. Salem looks for earnings to increase 21.6% in 1986, to $9.50 a share. Salem also recommends Chemical New York for investors willing to wait for long-term appreciation. The bank posted a 15% increase in earnings per share in the first quarter, when a $39.2-million gain on securities investments helped offset a 12% rise in noninterest expenses and an $83.8-million provision for bad loans. Some analysts worry about the quality of Chemical's loan portfolio and a doubling of net loan write-offs in the first quarter to $60.7 million. But Salem says Chemical's loan portfolio ranks close to the top in quality. He expects Chemical's earnings to climb 8% this year, to $7.75 a share. William Weiant, a bank analyst at First Boston Corp., looks for a sharp rise in earnings at Chase Manhattan. A fiasco in government securities trading and other troubles in the early Eighties tarnished its image and contributed to three years of lackluster earnings. The worst may be over: last year's earnings of $6.15 a share passed the 1981 record by 78 cents a share. The comeback continued in the first quarter, when Chase's earnings were up 13% to $1.59 a share. Weiant, who thinks the bank will wind up the year with earnings of at least $6.50, believes Chase's stock could hit $65 a share in the next 12 to 18 months.

CHART: COMPANY ASSETS NET INCOME STOCK PRICE RECENT 3/31/ 86 latest four RANGE PRICE in billions quarters last 12 months P/E multiple in millions Citicorp $181.9 $991.0 $40.00-$63.75 $61.75 8.9 Chase $88.3 $574.6 $24.50-$49.50 $47.50 Manhattan 7.7 J.P. $69.8 $773.9 $44.00-$87.38 $85.63 Morgan 10.0 Chemical $58.0 $403.1 $33.25-$56.25 $54.50 New York 7.4 1Based on earnings for the latest four quarters, exclusive of nonrecurring item .