Chicago, IL – May 9, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: AngloGold Ashanti PLC AU, Barrick Mining Corp. GOLD and Gold Fields GFI.
Here are highlights from Thursday’s Analyst Blog:
AngloGold Ashanti PLCand Barrick Mining Corp. are leading global gold mining names with diversified operations across multiple continents. Gold prices have gained 28% so far this year. This has been supported by safe-haven demand amid geopolitical uncertainty, escalating trade tensions, stock market volatility and U.S. dollar weakness during this period.
This trend is expected to continue, fueled by robust central bank buying; expanding industrial use in energy, healthcare and technology; and escalating trade tensions. Backed by this rally, the Zacks Mining - Gold industry has jumped 48.7% year to date compared with the Zacks Basic Materials sector's growth of 4.1%. The S&P 500 has, meanwhile, declined 4.9%.
For investors looking to ride this momentum, the question is: which gold stock should you put your money on? To find out more, let us dive into the fundamentals, growth prospects, and challenges of both AngloGold Ashanti and Barrick Mining.
The company has a diverse portfolio, including 11 operating assets in Argentina, Australia, Brazil, the Democratic Republic of the Congo, Egypt, Ghana, Guinea and Tanzania. In November 2024, the company 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%. Its mineral reserves went up to 31.2 million ounces at the end of 2024.
AU's total gold production in 2024, including a contribution of 40,000 ounces from Sukari, was 2.661 million ounces. Gold production for 2025 is projected at 2.9-3.225 million ounces.
Despite the Centamin acquisition, AngloGold Ashanti ended 2024 with an adjusted net debt to adjusted EBITDA of 0.21, which is the lowest since 2011. The company had $2.6 billion in liquidity, including cash and cash equivalents of $1.4 billion as of Dec. 31, 2024.
AU's board of directors recently approved a revised dividend policy, per which it will target a 50% payout of the free cash flow, subject to maintaining an adjusted net debt to adjusted EBITDA of 1.0X. The revised policy introduces a base dividend of 50 cents per share per year. AU's current payout ratio of 18.55% is, however, lower than the industry's 29.68%.
The company has been facing cost pressures on labor, material and contractor costs, and the impacts of higher royalties paid. Total cash costs per ounce for AngloGold Ashanti rose 4% year over year to $1,157 per ounce in 2024. Total cash costs have seen a CAGR of 4.8% over 2022-2024. All-in-sustaining costs per ounce ("AISC") for AU rose 4% year over year to $1,611 per ounce in 2024. The company's AISC has grown, witnessing a CAGR of 6.2% over 2022-2024. AngloGold Ashanti, meanwhile, remains focused on its Full Asset Potential program to offset the inflationary impacts.
In May 2023, AU and Gold Fields (GFI) proposed a joint venture to combine their Tarkwa and Iduapriem gold mines in Ghana. The combination was expected to create the largest gold mine in Africa, with an extended life, higher production and lower costs. However, Gold Fields and AngloGold Ashanti were not able to secure the requisite approvals from the Ghana government. They recently announced their decision to put the joint venture on pause and instead focus on improving their respective assets.
The company is progressing with its key growth projects that should significantly contribute to its production. It has a solid pipeline of projects and opportunities, with drilling underway across high-potential targets in the Americas, Africa and Asia. Along with its world-class portfolio of six Tier One gold mines, Barrick Mining is building its copper business. It will be a meaningful contributor to growing production volumes and provide the company with a diversification option.
Barrick Mining reported gold production of 758,000 ounces in the first quarter of 2025. Even though it was down 19.4% year over year, it came in at higher than the company's guided 700,000-750,000 ounces. GOLD has stated that it has been on track to produce gold of 3.15-3.5 million ounces.
Backed by its solid liquidity position and healthy cash flows, the company has been investing in development, exploration and acquisition opportunities while driving shareholder value and lowering debt. Barrick Mining had cash and cash equivalents of $4.1 billion as of the first quarter end. The operating cash flow was $1.2 billion for the first quarter, marking a 59% year-over-year surge.
The company's board approved a quarterly dividend of 10 cents per share and repurchased $143 million of its shares in the first quarter. Notably, GOLD's payout ratio of 46.95% is higher than that of the industry.
Barrick Mining, however, remains challenged by higher costs. Its cash costs per ounce of gold and AISC increased around 16% and 20% year over year, respectively, in the first quarter. For 2025, the company projects total cash costs per ounce of $1,050-$1,130 and AISC of $1,460-$1,560 per ounce. These projections suggest a year-over-year increase at the mid-point of these ranges. Increased mine-site sustaining capital spending and higher labor costs may lead to hiked costs.
The Zacks Consensus Estimate for AngloGold Ashanti's 2025 earnings is at $3.48, indicating year-over-year growth of 57.5%. Earnings estimates of $4.05 for 2026 suggest a rise of 16.4%. EPS estimates for both 2025 and 2026 have been trending south over the past 60 days.
The Zacks Consensus Estimate for Barrick Mining's earnings for 2025 is at $1.66, indicating a year-over-year jump of 31.75%. The 2026 estimate of $1.99 implies growth of 19.9%. The estimates have been trending north over the past 60 days. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Year to date, the AU stock has surged 85.2%, outperforming the industry's rally of 48.8%. Meanwhile, GOLD has gained 23.4%.
AU is currently trading at a forward 12-month earnings multiple of 11.89X, higher than its five-year median. The GOLD stock is currently trading at a forward 12-month earnings multiple of 10.93X, lower than its five-year median.
The average price target on AngloGold Ashanti suggests a 6.14% decline from its last closing price of $43.68. The highest target of $53 implies a gain of 21.3%. Meanwhile, the average price target on Barrick Mining implies a 25.7% increase from its last closing price of $19.40. The highest target of $30.96 indicates a rise of 59.6%.
Both AngloGold Ashanti and Barrick Mining are poised to benefit from the current surge in gold prices and higher production expectations despite increased costs. GOLD provides added appeal through its diversification into copper, offering a broader commodity exposure.
While AU has outperformed GOLD in terms of year-to-date price gains, the recent downward trend in earnings estimates raises caution. AngloGold Ashanti's stalled ambitions to build Africa's largest gold mine are acting as setbacks. Meanwhile, Barrick Mining stands out with a higher payout ratio, an active share repurchase program, and greater upside based on analyst price targets.
Given these factors, Barrick Mining, which currently has a Zacks Rank #2 (Buy), a cheaper valuation and a Value Score of A, appears to be a more compelling investment choice than AngloGold Ashanti, which has a Zacks Rank #3 (Hold) and a Value Score of D.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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