UBS Predicts Outperformance for Specific Stocks Amid Imminent Iran Nuclear Deal Settlement

As tensions in the Middle East appear to be subsiding, UBS anticipates that a potential settlement between the United States and Iran could drive significant gains for specific equities, such as Southwest Airlines and Eastman Chemical. Following a recent “memorandum of understanding” to cease military operations—with an official signing ceremony scheduled for this Friday in Switzerland—the bank has identified several U.S. stocks poised to benefit from the geopolitical resolution.

“These stocks have a negative score on our qualitative framework (i.e., most negatively impacted by the conflict), have underperformed since 2/27, are Buy-rated, cheap on [price-to-earnings] relative to the market against their norms and not crowded,” UBS stated in a client note. The bank noted that these selections are less crowded than the MSCI U.S. index, increasing their potential for outperformance.

Southwest Airlines has emerged as a key beneficiary in these projections. Jefferies analysts have also expressed optimism regarding the carrier; while maintaining a “hold” rating, the firm raised its price target from $37 to $44. Following meetings with Southwest leadership, analyst Sheila Kahyaoglu noted that management is increasingly confident in achieving earnings per share exceeding $4 by 2026, supported by steady fare increases, industry-wide capacity discipline, and stable fuel costs. Southwest Airlines shares have climbed 15% year-to-date.

Eastman Chemical also appears on the UBS list. In April, JPMorgan upgraded the chemical manufacturer from “neutral” to “overweight,” with analyst Jeffrey Zekauskas raising the price target from $70 to $80 per share. With Eastman Chemical shares up nearly 15% in 2026, Zekauskas’ updated forecast suggests a 6% upside from current levels. “We think that Eastman is a good risk/reward vehicle on a total return basis. We expect Eastman’s earnings to experience a positive turn in 2026,” Zekauskas noted, adding that the company is well-positioned to benefit from rising commodity earnings in the short term and a recovery in durable goods manufacturing over the long term.

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