AngloGold Ashanti PLC AU stock is currently trading at a forward 12-month earnings multiple of 10.55X, which is a discount to the Zacks Mining – Gold industry’s average of 10.97X.
The stock also remains attractively priced compared with peers such as Agnico Eagle Mines AEM and Newmont Corporation NEM, which are trading higher at 15.11X and 11.80X, respectively.
Let us dig deeper to understand if the current valuation makes AU a smart buy.
AngloGold Ashanti Stock Outperforms Industry & Sector
AU has skyrocketed 172% in a year, outperforming the industry’s 85.3% surge. Meanwhile, the Basic Materials sector has risen 37.2%, and the S&P 500 has rallied 17.4%.
The company also surpassed Agnico Eagle Mines and Newmont, which have soared 89.5% and 127.1%, respectively, in a year.
AngloGold Ashanti Delivers Strong FY25 Results Amid Cost Pressures
AU posted gold revenues of $9.73 billion in 2025, which surged 71.5% year over year. This was driven by a 16% year-over-year increase in gold production in the year and higher metal prices.
The upside in gold production was attributed to the contributions from the Sukari mine, which marked its first full-year contribution and reported a production of 500 thousand ounces in 2025. The production was also driven by a 20% year-over-year increase in Obuasi, a 6% rise in Siguiri and 2% growth in Geita. Cuiaba’s production also increased 1%, while Vanguardia rallied 2%.
The company generated a record $2.9 billion in free cash flow in 2025, a 204% year-over-year whopping rise. AngloGold Ashanti ended the year with $4.4 billion in liquidity, including cash and cash equivalents of $2.9 billion.
However, AU has been facing headwinds from higher operating costs for the last few quarters. Total cash costs per ounce for the group rose 7% year over year to $1,242 in 2025. All-in-sustaining costs per ounce increased 6% to $1,706. The upside was due to inflationary cost pressures from increased labor and mining contractor costs. Nonetheless, the impacts of these elevated costs on its earnings were offset by higher sales volumes and prices.
Gold production for 2026 is projected at 2.80-3.17 million ounces. This suggests a year-over-year dip of 3% at the mid-point. Higher costs are also expected to weigh on the company’s performance in 2026.
AU’s Long-term Growth Strategy Remains Solid
AU is executing a clear strategy of organic and inorganic growth. The acquisition of Egyptian gold producer Centamin in November 2024 added the large-scale, long-life, world-class Tier 1 asset, Sukari, to its portfolio. It has the potential to produce 500,000 ounces annually.
The company closed the Augusta Gold Corp acquisition in October 2025, boosting its footprint in the Beatty District of Nevada, which is in one of the most significant emerging gold districts in the United States.
The company is also moving forward with its investment strategy, with additional capital expenditure approved for this year at its Geita Gold Mine in Tanzania. AU has also planned investments of $100 million over the next three years for the expansion of the mine. AU will raise annual exploration spend at the mine from around $35 million to $50 million. The ongoing investment aims to increase Geita’s mineral reserves by 60%, which will extend the mine life from seven years to at least a decade by 2028.
Obuasi remains a significant pillar of its long-term strategy, which is expected to deliver 400,000 ounces of annual production at competitive costs by 2028. At the Siguiri mine, 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.
Apart from these factors, AU is gaining from the increase in gold prices in 2026 after having a solid performance in 2025. Gold prices have increased 49.2% in a year. The metal has been supported by geopolitical tensions, tariff concerns and continuous purchasing by central banks. Gold prices are currently trending above $4,724 per ounce. Along with AU, the increase in gold prices is aiding Agnico Eagle Mines and Newmont.
AngloGold Ashanti’s Estimates Move North
The Zacks Consensus Estimate for AngloGold Ashanti’s 2026 sales is $12 billion, indicating a 23.2% year-over-year jump. The consensus mark for the year’s earnings is pegged at $9.25 per share, suggesting a year-over-year upsurge of 72.2%.
The Zacks Consensus Estimate for 2027 sales implies a 14.4% year-over-year dip. The same for earnings suggests a dip of 1.8%.
EPS estimates for 2026 have moved 17.5% north over the past 60 days, while the same for 2027 has moved up 11.4% over the past 60 days.
Final Take on AU Stock
AngloGold Ashanti is poised to benefit from the current increase in gold prices and solid production. While its appealing valuation makes the stock attractive, higher operating costs suggest caution for new investors.
Existing shareholders should stay invested in the AU stock to benefit from its solid long-term growth prospects. The company currently has a Zacks Rank #3 (Hold), which supports our thesis. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Newmont Corporation (NEM): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).