UBS and Jefferies Flag Southwest Airlines, Eastman Chemical as Potential Winners If U.S.-Iran Deal Holds

Since Morgan Stanley and Goldman Sachs cut their oil forecasts last week on the preliminary U.S.-Iran memorandum of understanding, the analyst conversation has shifted from commodity prices to individual equities that were beaten down by Middle East uncertainty.

UBS is the latest bank to weigh in with a structured view. In a note to clients, the bank outlined a basket of U.S. stocks it believes could outperform on a full Middle East resolution. The selection criteria were specific: stocks had to carry a negative score on UBS's qualitative conflict-impact framework, meaning they were most hurt by the fighting; had to have underperformed since February 27; and had to be Buy-rated, cheap relative to the market on a price-to-earnings basis, and not crowded by institutional positioning. According to CNBC's reporting on the note, UBS wrote that these names "are less crowded than MSCI U.S., and hence may be more likely to outperform."

Southwest Airlines

Southwest Airlines is the most prominent name on the UBS list. Shares are up about 15% year-to-date as of June 16, 2026, but UBS believes the stock still has room if a formal peace deal removes geopolitical risk premium from fuel costs.

Jefferies added independent support on Tuesday. Analyst Sheila Kahyaoglu raised her price target on Southwest to $44 from $37, though Jefferies maintained a hold rating. Kahyaoglu said her team recently met with Southwest management, and the takeaway was measured optimism: leadership told her they are "increasingly confident that the backdrop of sticky fare increases, industry discipline and exits, and stable-ish fuel supports the ability to achieve greater than $4 per share of EPS in 2026 if demand remains resilient into off-peak."

That conditional matters. Southwest's earnings thesis depends on demand holding through slower travel periods and on fuel costs staying predictable. A deal that only partially lowers oil prices, or one that collapses before the Swiss signing ceremony, resets both assumptions.

Eastman Chemical

Eastman Chemical is the other named stock. JPMorgan upgraded the company to overweight from neutral in April, with analyst Jeffrey Zekauskas lifting his price target to $80 from $70. Eastman shares have gained roughly 15% in 2026. Zekauskas' $80 target implies approximately 6% additional upside from current levels, according to CNBC.

Zekauskas' rationale is two-part: near-term commodity earnings improvement and a longer-term recovery in durable goods manufacturing. Neither is directly tied to the Iran deal. Eastman benefits from lower feedstock costs when oil falls and from demand-side recovery in industrial end markets. A Middle East resolution accelerates the commodity piece. The durable goods recovery depends on broader economic conditions that have nothing to do with Tehran.

The Counterargument

The strongest pushback on the entire trade is this: a memorandum of understanding is not a finalized treaty, and Middle East peace deals have a documented history of collapsing before ink dries on the formal document. Investors who bought geopolitical-recovery plays in prior false-dawn moments, whether after early Gaza ceasefire talks or during earlier Iran nuclear negotiation phases, absorbed losses when talks fell apart. The signing ceremony in Switzerland is scheduled for Friday, but until it happens and is verified, every stock thesis here is conditional on a political outcome that remains unsigned as of June 16.

Barclays made this point in a separate note flagged by CNBC: the Iran deal won't solve oil supply issues overnight. Barclays is maintaining its $100-per-barrel oil forecast, suggesting the bank does not expect Iranian barrels to flood the market quickly even if sanctions relief follows a deal. That complicates the fuel-cost thesis for Southwest in particular.

What UBS Is Actually Saying

UBS's framework represents a screen for stocks that were disproportionately punished by conflict risk, remain cheap, and carry low crowding risk. This means a reversal won't get trampled by a stampede of funds all exiting the same position simultaneously. That's a technical and relative-value argument, not a fundamental one.

Investors treating this as a strong buy signal should notice that Jefferies, with its own independent research, still rates Southwest a hold despite raising the target.

What Comes Next

The unresolved question that will determine whether any of this matters: does the formal signing in Switzerland happen on schedule, and does it include concrete timelines for Iranian oil sanctions relief? Barclays' maintained $100 oil forecast suggests at least one major bank expects implementation to be slow and contested regardless of what the document says. If sanctions relief is phased over years rather than months, the fuel-cost tailwind for airlines is muted, and the commodity earnings bump for Eastman is smaller than JPMorgan's April upgrade implied.