Karoon Energy Ltd (ASX: KAR) and Santos Ltd (ASX: STO) shares have been standout performers in 2026.
Closing at $2.14 apiece on Wednesday, Karoon Energy shares are now up 39% year to date.
And after ending yesterday at $7.77 each, Santos shares have gained 26% so far in 2026.
To put that performance into some better context, the S&P/ASX 200 Index (ASX: XJO) is down 0.3% this calendar year.
Atop those capital gains, Santos also paid out a 14.5-cent per share unfranked interim dividend on 25 March. Santos stock trades on a partly franked trailing dividend yield of 4.5%.
And Karoon Energy paid its fully-franked 3.1 cent per share final dividend on 31 March. Karoon Energy shares trade on a partly franked 2.6% trailing dividend yield.
But after this strong outperformance, Medallion Financial Group's Stuart Bromley believes investors would do well to take profits on these two ASX 200 energy stocks (courtesy of The Bull).
Here's why.
Image source: Getty Images
Time to sell Santos shares?
"Santos is a global energy company," Bromley said. "It has operations across Australia, Papua New Guinea, Timor-Leste and the United States."
Looking at the company's calendar year 2025 results, he noted:
Total revenue from ordinary activities fell by 8% in full year 2025 when compared to the prior corresponding period. The fall in revenue was due to lower realised prices. Net profit after tax was down 33%.
As for 2026, Bromley said, "The share price has risen from $5.92 on January 7 to trade at $7.61 on April 23."
Which leads to his sell recommendation on Santos shares.
"We would be inclined to lock in gains given volatile and uncertain energy prices emanating from the conflict in the Middle East," Bromley concluded.
Time to lock in profits on Karoon Energy shares?
Atop from recommending taking profits on Santos shares, Bromley also has a sell recommendation on Karoon Energy shares.
"Karoon is an oil and gas explorer and producer," he said. "It has assets in Australia, the United States and Brazil."
As for Karoon Energy's 2025 results, Bromley noted, "Revenue from ordinary activities was down 19% in full year 2025 when compared to the prior corresponding period. Net profit after tax was down 2%."
Bromley's sell recommendation is based on similar logic to his concerns over Santos' rapid year-to-date share price gains.
Commenting on Karoon Energy, he concluded:
The shares have risen from $1.54 on February 27 to trade at $2.16 on April 23. In our view, Karoon has benefited from increasing crude oil prices since the conflict in the Middle East started on February 28.
We believe these sorts of opportunities should be taken and we have locked in profits on Karoon.
Trading at US$111 per barrel on Wednesday, the Brent crude oil price has surged more than 53% since the start of the Iran war at the end of February.
