Analysts cite cost inflation and valuation concerns after AU stock surged 110% in the past year.
ABSA Securities downgraded AngloGold Ashanti (AU) to Underweight with a $100.82 price target, signaling caution after the stock climbed 110% over the past year. The move reflects concerns over mining cost inflation, operational risks, and a valuation that now aligns with fundamentals.
The downgrade follows a strong rally in gold and gold mining equities, with AU emerging as a top performer in the materials sector. Analysts suggest the stock’s rapid ascent may limit further upside, despite ongoing operational improvements and central bank demand for gold.
ABSA, a South African investment bank with deep mining expertise, carries significant influence in the gold sector. The downgrade underscores a broader view that gold prices may have peaked, prompting portfolio adjustments.