Roth Capital downgrades these six energy stocks after U.S.-Iran war ceasefire
Several energy stocks have little room left to run after the U.S. and Iran reached a two-week ceasefire to try and reach an agreement that would end the war, according to Roth Capital. The investment bank downgraded to neutral from buy the following names: Diamondback Energy , Permian Resources , Matador Resources , SM Energy , Magnolia Oil and Gas and Talos Energy . Roth did raise its price targets for all six names, but those revised forecast don’t point to much in the way of gains. “These stocks are all near 52-week highs and due to our expectations that front-month oil prices are likely to move lower in the near term and trade closer to $70 per bbl as opposed to $100 per bbl,” analyst Leo Mariani said in a note to clients. “We think investors should stay more defensive in E & P with lower-beta names in the near term.” FANG mountain 2026-02-28 Diamondback Energy shares have risen since the beginning of the Iran war. Energy stocks rallied as Iran largely blocked shipments through the Strait of Hormuz in response to Israeli and American military strikes. Restrictions at the waterway, which once accounted for roughly 20% of global oil shipments, triggered a massive disruption of crude oil supplies. All six energy stocks mentioned in Roth Capital’s note have risen between 15% and 35% since the Iran war broke out in late February. However, those names shed between roughly 6% and 9% in premarket trading on Wednesday as oil price declined following the U.S. and Iran’s agreement to a temporary ceasefire to negotiate an end to the conflict. Brent crude futures fell 15% to roughly $92. That’s more than 20% off the $118 price level hit in late March as the Iran war seemed to be near its apex. Oil prices are likely to continue to move lower as the Iran war continues to wind down, further taking the steam out of energy stocks’ rallies, according to Roth Capital. “We expect front-month and longer-dated oil prices to move lower rather quickly on the end of the conflict with Iran and a fuller reopening of the Strait of Hormuz,” Mariani wrote. “We don’t see extensive damage to existing oil-producing infrastructure or export mechanisms, and we think most shut-in oilfields can return to production within days or weeks and not months, so we expect physical shortages can ease rather quickly.”
