The Lloyds (LSE:LLOY) share price has been on a rampage in 2025, climbing by a staggering 78% over the last 12 months. And when including the extra gains from dividends, the total return stands at an impressive 87.4%!
That means anyone who invested £10,000 a year ago now has around £18,740 sitting in the bank.
Obviously, past performance never guarantees future profits. But could there be some new key catalysts that could trigger yet another rally in 2026? And if so, just how much money could investors realistically earn by the end of this new year?
Can Lloyds shares double in 2026?
As a £57.1bn banking institution, Lloyds has some serious work to do to support a doubling of its share price. But there are several scenarios where this might indeed happen.
- Emergency rate hike – If inflation suddenly surges, the Bank of England could be forced to undo its recent interest rate cuts, enabling Lloyds’ lending margins to expand even wider, lifting the whole banking sector.
- Government housing stimulus – If the government announces a new wave of home building and affordability stimulus to catch up towards its target of 1.5m new homes, it could trigger a massive wave in mortgage demand.
- Rival acquisition – If Lloyds decides to use its improved financial strength to acquire a large rival bank, it could quickly double its operations.
Sadly, none of these scenarios seems all that likely this year. While inflation is proving sticky, it’s nonetheless slowly trending downward.
As for housing stimulus, the state of public finances appears to weak for such expansive stimulus. And while a rival acquisition is not entirely implausible, regulators will most likely intervene given Lloyds’ already dominant position within the British banking sector.
So, if Lloyds shares aren’t going to double in 2026, how high could they climb?
Here’s what the experts predict
As one of the most popular stocks in Britain, Lloyds receives a lot of attention from institutional investors. And throughout 2025, many have been upgrading the stock from a Hold to a Buy recommendation.
Looking ahead to 2026, this bullish sentiment remains strong with both Goldman Sachs and Royal Bank of Canada reiterating their stances. In fact, these institutions are currently the most bullish among their peers, citing strong cash generation, aggressive share buybacks, and robust net interest margins.
But even with these catalysts, the Lloyds share price target from these expert analyst teams stands at just 110p – around 13.4% higher than where the stock is trading today. Needless to say, that’s a far cry from a 100% gain.
What’s more, that’s assuming no new spanners are thrown into the works this year. The motor finance scandal redress scheme by the Financial Conduct Authority remains a point of uncertainty looming over this business.
Meanwhile, should the already subdued economic conditions worsen, demand for new loans would likely suffer, preventing Lloyds from capitalising on its elevated lending margins.
Is Lloyds worth considering?
For investors seeking explosive growth, Lloyds seems unlikely to be a good fit. For those seeking a more defensive dividend-paying business, the bank could be potentially interesting and worthy of closer inspection. But overall, I think there are far better under-the-radar opportunities to explore right now.
