When shopping for UK shares to buy, I usually start by looking at the biggest losers. This might sound like an unusual approach but when a stock’s fallen out of favour with investors, it doesn’t necessarily mean it’s in terminal decline. Instead, there could be other temporary factors at play.
Here are two examples that I think could stage a comeback in 2026.
Bottom of the pile
With its share price down by nearly 30%, Diageo’s (LSE:DGE) been the FTSE 100’s second-worst performer since January 2025.
And at the beginning of what he hopes won’t be a dry January, Sir Dave Lewis started as the drinks giant’s new boss. His primary task is to find a way of reversing the group’s falling sales volumes in an industry where people are drinking less.
He must also contend with erratic US tariffs, which have cost the company an estimated $200m.
Another potential problem is the group’s high level of borrowings. However, the sale of its stake in East African Breweries for $2.3bn should help bring this down.
Reasons to be optimistic
But it’s not all doom and gloom.
Sir Dave’s inherited an impressive portfolio of brands, which includes Guinness, Johnnie Walker, and Smirnoff. All price points are covered, including a number of premium brands, which should help if Generation Z continues to drink better, not more.
And although it’s impossible to be certain, it looks as though President Trump’s achieved what he set out to do with his ‘Liberation Day’ announcements. Most countries now appear to be treating the US more favourably than previously, which means the most extreme tariff rates have now been eased.
America, a key market, is also growing strongly.
Diageo’s been around since 1997 and has come through some difficult times before. And its success with Guinness shows what can be done with a strong brand and some clever creative minds.
‘Drastic Dave’ built an impressive reputation for cutting costs when he was at Tesco. Shareholders will be hoping that he can work his magic on Diageo’s top and bottom lines. I remain optimistic, although I think the stock might be a bit of a slow burner.
A double-edged sword?
Since January 2025, RELX (LSE:RLX) shares have fallen 18% on concerns that artificial intelligence (AI) could disrupt its business. However, the data, analytics, and risk solutions company sees the technology as an opportunity rather than a threat. And there’s some evidence to support this view.
For the nine months ended 30 September 2025, RELX reported a 7% rise in underlying revenue compared to a year earlier. Importantly, it reported an “improving long-term growth trajectory”. Its financial crime compliance solutions and its “next generation” AI-powered legal assistant are doing particularly well.
Despite this, analysts reckon its shares are 40% undervalued.
Yes, it faces some challenges. In particular, a cyber security attack remains an ever-present threat. Also, AI could open the door for some lower-cost competitors to take market share.
However, with its predominantly subscription-based revenue, high margin, global reach, and blue-chip client base, I think the group’s share price could do well this year.
On reflection, I think both stocks are worth considering. But RELX is my favourite. Indeed, I bought some of its stock just before Christmas.
