AngloGold Ashanti Skyrockets 104% YTD: How to Play the Stock?

AngloGold Ashanti PLC AU stock has appreciated 104% year to date, outperforming the Zacks Mining – Gold industry’s 53% rise. Meanwhile, the Basic Materials sector has risen 13.7%, and the S&P 500 has gained 5.9% in the same timeframe.AU Stock's YTD Performance vs. Industry, Sector & S&P 500 Image Source: Zacks Investment Research The AU stock closed at $47.11 yesterday, 8.5% shy of its 52-week high of $51.11 achieved on June 13, 2025.AngloGold Ashanti has also surpassed gold mining stocks like Agnico Eagle Mines AEM, Newmont Corporation NEM and Barrick Mining Corporation B, which have rallied 53.3%, 61.6% and 36.9%, respectively, so far this year.AU’s YTD Performance vs. Agnico Eagle, Newmont & Barrick Image Source: Zacks Investment Research AngloGold Ashanti has been trading above the 200-day simple moving average (SMA) since Jan. 14, 2025. The stock is also currently trading above the 50-day SMA, which continues to read higher than the 200-day SMA, indicating a bullish trend.AU Stock Trades Above 50-Day & 200-Day SMAs Image Source: Zacks Investment Research With the AU stock riding high, investors may rush to add it to their portfolio. However, before making a decision, it will be prudent to take a look at the reasons behind the surge, the company’s growth prospects and risks (if any) in investing.What’s Driving the AngloGold Ashanti Stock’s Surge?Rising Gold Prices: Gold prices are at around $3,370 per ounce, at three-week highs, as President Donald Trump’s announcement of new tariffs on Europe and Mexico drove investors toward the safe haven asset. The move follows a broader set of tariff hikes unveiled last week, targeting more than 20 countries.Gold prices are likely to continue to gain in this uncertain environment, with increased purchases by central banks, hopes of interest rate cuts and geopolitical tensions. Solid Financial & Operational Results in Q1: The company reported solid first-quarter 2025 results, with earnings per share soaring 529% year over year to 88 cents. This was driven by higher gold production, disciplined cost control and higher gold prices.Gold production increased 22% year-over-year to 720,000, marking its strongest first-quarter performance since 2020. This reflected the first full-quarter contribution of 117,000 ounces from the recently acquired Sukari mine, as well as upbeat performances at Siguiri, Tropicana, Cerro Vanguardia and Sunrise Dam.Total cash costs per ounce for the group, however, were up 4% to $1,223 per ounce. All-in-sustaining costs per ounce increased 1% to $1,640 per ounce due to higher sustaining capital expenditure, partly offset by higher gold sold.AngloGold Ashanti, meanwhile, remains focused on its Full Asset Potential program to offset the inflationary impacts. The company’s average real cash costs moved up 1% from the timeline between first-quarter 2021 and first-quarter 2025 compared with more than 20% for its peer group, which includes Agnico Eagle Mines, Barrick and Newmont. Lowest Leverage Since 2011: AU’s free cash flow increased almost seven-fold to $403 million in the first quarter from $57 million in the year-ago quarter. It has managed to take down its adjusted net debt to $525 million from the $1.322 billion at the year-ago quarter’s end. The adjusted net debt to adjusted EBITDA ratio improved to 0.15X in the first quarter from 0.86X in the first quarter of 2024. Its debt-to-capital ratio was 0.19 at the end of the first quarter. AngloGold Ashanti ended the first quarter of 2025 with $3 billion in liquidity, including cash and cash equivalents of $1.5 billion. FY25 Guidance Suggests Upside: Gold production for 2025 is projected at 2.9-3.225 million ounces. This suggests year-over-year growth of 9-21%. For 2026, the company expects similar output levels as in 2025.Strategic Growth Focus: AngloGold Ashanti is executing a clear strategy of organic and inorganic growth. In November 2024, it acquired Egyptian gold producer Centamin, adding the large-scale, long-life, world-class Tier 1 asset (Sukari) to its portfolio. It has the potential to produce 500,000 ounces annually. With this addition, the proportion of gold production from its Tier 1 assets has moved up from 62% to 67%.Obuasi remains a significant pillar of its long-term strategy. The company’s focus this year is to continue the implementation of the underhand drift and fill (UHDF) mining method and make stoping improvements. This important orebody is expected to deliver 400,000 ounces of annual production at competitive costs by 2028. At Siguiri, efforts are underway to improve mining volumes through ongoing improvements to fleet availability and utilization, and to introduce gravity recovery in the processing plant to further improve metallurgical recovery. AngloGold Ashanti is intensifying its efforts to streamline operations and sharpen its focus on core assets, particularly in the United States. AU recently inked a deal to sell its interest in the Mineração Serra Grande mine in Brazil — one of its higher-cost assets. This follows the sale of its interests in two gold projects in Côte d’Ivoire.The company recently divested its stake in Canada’s G2 Goldfields. AU’s proposed joint venture (announced in May 2023) with Gold Fields to combine their Tarkwa and Iduapriem gold mines had been on hold as they had not obtained the requisite approvals from the Ghana government. So divesting the stake is a wise move.AngloGold Ashanti Sees Upward Estimate Revision ActivityThe Zacks Consensus Estimate for AngloGold Ashanti’s 2025 sales is $8.85 billion, indicating 52.8% year-over-year growth. The consensus mark for the year’s earnings is $4.99 per share, suggesting a year-over-year upsurge of 125.8%. The Zacks Consensus Estimate for 2026 sales implies 2.3% year-over-year growth. The same for earnings indicates a decline of 1.3%. Image Source: Zacks Investment Research  Image Source: Zacks Investment Research EPS estimates for 2025 and 2026 have been trending north over the past 60 days. Image Source: Zacks Investment Research AU’s Valuation is AttractiveAU is currently trading at a forward 12-month earnings multiple of 9.51X, at a discount to the industry average of 12.62X. The stock has a Value Score of B. Image Source: Zacks Investment Research Meanwhile, Agnico Eagle, Newmont and Barrick are trading higher at 18.16X, 12.70X and 9.79X, respectively.AU's Valuation vs. Agnico Eagle, Barrick & Newmont Image Source: Zacks Investment Research AngloGold Ashanti’s Average Target Price Suggests UpsideThe average price target on AU suggests a 1.72% upside from its last closing price of $47.11. The highest target of $58 also implies growth of 23%. Image Source: Zacks Investment Research Final Take on AngloGold Ashanti StockAU is poised to benefit from the current surge in gold prices and higher production expectations, as well as its efforts to control costs. Its efforts to streamline its portfolio and lower debt levels are also commendable. With an appealing valuation and upward earnings estimate revisions, now appears to be a favorable time to consider adding the stock to your portfolio. This is further supported by its Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. 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Click to get this free report Newmont Corporation (NEM): Free Stock Analysis Report AngloGold Ashanti PLC (AU): Free Stock Analysis Report Agnico Eagle Mines Limited (AEM): Free Stock Analysis Report Barrick Mining Corporation (B): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks