These stocks should outperform as the Iran deal is finalized, says UBS

With the end of the Middle East war in sight, UBS thinks that stocks like Southwest Airlines and Eastman Chemical could be beneficiaries of a potential settlement between the U.S. and Iran. Earlier this week, the U.S. and Iran reached a deal to end the war in the Middle East. Both sides have agreed to a "memorandum of understanding" and have decided to cease military operations, with an official signing ceremony to take place in Switzerland this Friday. With this deal on the horizon, UBS shared a list of U.S. stocks that could potentially benefit and outperform on a Middle East resolution. "These stocks have a negative score on our qualitative framework (i.e. most negatively impacted by the conflict), have underperformed since 27/2, are Buy-rated, cheap on [price earnings] relative to the market against their norms and not crowded," the bank wrote in a note to clients. Select names from UBS' basket are shown below. These names, the bank wrote, "are less crowded than MSCI U.S., and hence may be more likely to outperform." UBS identified Southwest Airlines as a possible beneficiary. In a Tuesday note, analysts from Jefferies were similarly optimistic on the stock. While the bank currently has a hold rating on the name, it hiked its price target to $44 from $37. Analyst Sheila Kahyaoglu said her team recently met with Southwest leadership. …