Why I’m ignoring Lloyds’ shares and buying other cheap UK stocks for my ISA!

Lloyds’ shares have been stellar performers in 2025, but that momentum might not continue in 2026. That’s why I’ve been buying other cheap UK stocks.

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Few UK stocks have delivered such impressive returns in 2025 as Lloyds. The British banking giant has grown its market-cap by almost 75% since the start of the year, transforming a £1,000 investment into roughly £1,750. And that’s before counting dividends.

In 2026, this upward momentum could continue. The company has implemented clever hedging strategies that mean even if the Bank of England continues to cut interest rates, profit margins will likely remain elevated throughout 2026.

With that in mind, it isn’t surprising that most institutional analysts are bullish on this business. But when zooming in on share price forecasts, the average consensus is that Lloyds’ shares will only rise to 99.5p.

That’s around 4% higher than current levels which, when combined with a 3.5% dividend yield, still suggests some respectable returns could be on the horizon. But it pales in comparison to the explosive potential of other cheap UK stocks.

Here’s one I’ve already started buying.

The hidden copper king

At the heart of technologies like nuclear power and electric vehicles lies copper. The red metal plays a massive, often overlooked, role in modern infrastructure.

But there’s a critical problem. Limited new discoveries by mining companies and a continuous upward trend in demand are translating into a global deficit that’s on track to continue expanding between now and 2035.

This trend’s already pushed up copper prices by almost 75% since July 2022. And following a recent report by JP Morgan, the copper market’s expected to get even tighter next year, courtesy of recent major disruptions to global mining operations.

But for Ecora Resources (LSE:ECOR), rising prices could send its share price flying in 2026. Here’s why.

Perfectly-timed disruption

Ecora’s a rather unique business. The group provides alternative financing to mining giants such as Capstone Copper and Rio Tinto to help cover the costs of getting shovels in the ground, in exchange for lifetime royalties.

Historically, most of its royalty portfolio has been focused on steelmaking coal. But over the last five years, management’s been repositioning itself to focus on critical base metals including copper, cobalt, and nickel.

2025 was the first time these base metals generated more than 50% of Ecora’s revenue. But looking out to 2026, this contribution’s set to grow even higher.

Several of its development-stage copper projects are on track to enter commercial production. That means Ecora not only benefits from higher prices but a significant ramp-up in copper volumes.

With this in mind, it isn’t surprising that some institutional analysts have started issuing very aggressive share price targets. This includes the team at Canaccord Genuity who thinks Ecora shares will climb to 155p by this time next year – almost 45% higher than where the stock’s trading today.

Obviously, this forecast isn’t guaranteed. Unexpected disruptions or delays at Ecora’s own royalty projects could easily result in targets being missed. Even if that doesn’t happen, a sudden drop in steelmaking coal prices could ultimately offset any gains made with copper. After all, for former still makes up a large chunk of Ecora’s income.

Nevertheless, with Ecora seemingly perfectly positioned to benefit from the long-term supply/demand dynamics of copper, it’s a risk I’ve decided to take. And it’s not the only UK stock I’ve been buying.

Zaven Boyrazian has positions in Ecora Resources Plc. The Motley Fool UK has recommended Ecora Resources Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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