AngloGold Ashanti (AU) Could Be 35% Undervalued Following Its Zacks Rank Sell Signal
AngloGold Ashanti (NYSE:AU) is back on investor radars after being added to the Zacks Rank #5 list following downward revisions to current year earnings estimates over the past two months.
See our latest analysis for AngloGold Ashanti.
Despite being added to the Zacks Rank #5 list, AngloGold Ashanti’s recent share price performance has cooled, with the 30 day share price return down 6.41% and the 90 day share price return down 21.03%, even though the 1 year total shareholder return stands at 63.8% and the 5 year total shareholder return is very large at more than 3x.
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AngloGold Ashanti now trades well below the average analyst price target and sits at an even steeper discount to some intrinsic value estimates. So where does fair value really lie after this sharp swing in sentiment and price?
Most Popular Narrative: 34.5% Undervalued
The most followed narrative on AngloGold Ashanti pegs fair value at $119.72 per share versus the latest close at $78.42, creating a wide gap that investors are now weighing against the recent pullback.
AngloGold Ashanti is a top-5 global gold producer with a diversified portfolio across Africa, the Americas, and Australia. The company combines large-scale reserves (~30 Moz) with meaningful production (~2.6 to 2.7 Moz/year), but operates at relatively high costs (AISC ~ $1,538 to $1,657/oz), placing it in a mid-to-high cost position globally.
Here, the valuation story for AngloGold Ashanti leans heavily on scale, reserve depth, and a specific view on future profitability and profit multiples. Want to see exactly how those pieces are stitched together into that fair value number?
Result: Fair Value of $119.72 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, investors still need to weigh AngloGold Ashanti’s relatively high all in sustaining costs and its exposure to higher risk jurisdictions, which could pressure this valuation case.
Find out about the key risks to this AngloGold Ashanti narrative.
Next Steps
With mixed signals around AngloGold Ashanti’s valuation and risk profile, it makes sense to move promptly from reading to reviewing the data yourself, then weigh both sides of the story through the 5 key rewards and 1 important warning sign.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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