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.

| More on:
A senior man using hiking poles, on a hike on a coastal path along the coastline of Cornwall. He is looking away from the camera at the view.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

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.

More on Investing Articles

Happy woman commuting on a train and checking her mobile phone while using headphones
Dividend Shares

Anyone can claim a share of this £86bn of passive income!

This £86bn stream of passive income is open to anyone with spare cash to invest. Of course, it comes with…

Read more »

A senior man and his wife holding hands walking up a hill on a footpath looking away from the camera at the view. The fishing village of Polperro is behind them.
Investing Articles

What’s a realistic goal to aim for when building a SIPP?

How big (or small) should someone dream when building up a SIPP? That depends on a number of different factors,…

Read more »

Road 2025 to 2032 new year direction concept
Investing Articles

A once-in-a-decade chance to buy these 3 beaten-down FTSE 100 shares

Harvey Jones picks out three FTSE 100 stocks that have had a difficult decade, but says they're a lot cheaper…

Read more »

National Grid engineers at a substation
Investing Articles

Here’s what 100 National Grid shares bought 5 years ago are worth now

Christopher Ruane looks at how National Grid shares have performed over the past few years and weighs whether he ought…

Read more »

Red lorry on M1 motorway in motion near London
Investing Articles

Up 242% in 2 years! Can anything stop the rampant Barclays share price?

Harvey Jones says the Barclays share price has been racing along lately but questions how long the FTSE 100 bank…

Read more »

Investing Articles

Can these FTSE 250 dividend stocks with big yields shine in 2026?

Here are two dividend stocks with forecast yields of 8.6% and 6.8% after years of steady payouts, and with earnings…

Read more »

UK coloured flags waving above large crowd on a stadium sport match.
Investing Articles

Up 17% today! Is Wise still worth considering for a Stocks and Shares ISA?

Wise put a smile on the face of anyone holding it in a Stocks and Shares ISA today. What news…

Read more »

UK coloured flags waving above large crowd on a stadium sport match.
Investing Articles

See how the Rolls-Royce share price has transformed £10,000 in just 3 years – it’s jaw-dropping

Harvey Jones is blown away by the Rolls-Royce share price and examines whether the FTSE 100 growth star can make…

Read more »