AU Surges 279.8% in a Year: Should You Buy, Sell or Hold the Stock?

AngloGold Ashanti PLC AU stock has rocketed 279.8% in a year's time, outperforming the Zacks Mining – Gold industry’s 146.3% upsurge. Meanwhile, the Basic Materials sector has soared 51.2% and the S&P 500 has rallied 20.8%.

The company also outperformed its peers like Agnico Eagle Mines AEM and Newmont Corporation NEM, which have soared 136.2% and 175.8%, respectively, in the same time frame.

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.

AngloGold Ashanti Posts Solid FY25 Results Despite High Operating Costs

AU’s adjusted EBITDA surged 129% year over year in 2025 to a record $6.3 billion. 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 recently acquired Sukari mine and the solid performances of  Obuasi, Siguiri, Geita, Cerro Vanguardia and Cuiabá. Gold revenues surged 71.5% to $9.73 billion in 2025.

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. However, 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 mid-point. Higher costs are also expected to weigh on the company’s performance in 2026.

AU’s Free Cash Flow Triples in FY25

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.

AngloGold Ashanti Focuses on Long-term Growth

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 77.5% 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 $5,160 per ounce. Along with AU, the increase in gold prices is also aiding Agnico Eagle Mines and Newmont.

AU’s Sales Estimates Indicate Y/Y Rise

The Zacks Consensus Estimate for AngloGold Ashanti’s 2026 sales is $11.98 billion, indicating a 23.1% year-over-year jump. The consensus mark for the year’s earnings is pegged at $9.27 per share, suggesting a year-over-year upsurge of 72.6%.

The Zacks Consensus Estimate for 2027 sales implies 14.3% year-over-year dip. The same for earnings suggests a dip of 1.8%.

EPS estimates for 2026 have moved 18.7% north over the past 60 days, while the same for 2027 has moved down 9.7% over the past 60 days.

AngloGold Ashanti’s Valuation Is Attractive

The AU stock is currently trading at a forward 12-month earnings multiple of 13.42X, which is a discount to the industry average of 13.46X.

Meanwhile, Agnico Eagle Mines and Newmont are trading higher at 17.48X and 14.28X, respectively.

Final Take on AU Stock

AngloGold Ashanti is poised to benefit from the current increase in gold prices and higher production expectations. 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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This article originally published on Zacks Investment Research (zacks.com).

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