Is AngloGold Ashanti Still a Buy Amid Record Free Cash Flow and Bullish Gold Trends?

The gold market is on fire, and AngloGold Ashanti (NYSE: AU) is riding the wave with a performance that screams "buy." With gold prices surging past $4,150 an ounce in November 2025 and analysts forecasting even higher peaks in 2026, the question isn't whether the gold sector is in play-it's whether AngloGold Ashanti can outpace its peers in capitalizing on this golden opportunity. Let's break down the numbers, strategy, and valuation to see if this mining giant still deserves a spot in your portfolio.

Earnings Momentum and Free Cash Flow: A Gold Rush in the Books

AngloGold Ashanti's Q3 2025 results were nothing short of explosive. The company reported a 141% year-over-year jump in free cash flow, hitting nearly $1 billion, driven by a 40% premium in realized gold prices compared to the prior year. Adjusted EBITDA surged 109%, and headline earnings rose 185%-numbers that scream operational discipline in a sector often plagued by cost overruns according to earnings call data.

This isn't just a one-quarter miracle. Management reaffirmed full-year guidance, citing stable cash costs and a focus on organic growth at key assets like Geita and Nevada. The $50 million investment at Geita to expand reserves is a masterstroke, ensuring production longevity in a market where supply constraints are tightening as reported in investor relations. With a net cash position of $450 million and $3.9 billion in liquidity, AngloGold Ashanti isn't just surviving-it's thriving according to financial analysis.

Valuation Metrics: Is the Stock Overpriced or Undervalued?

Let's get to the nitty-gritty. AngloGold Ashanti's P/E ratio of 20.88x is a steal compared to the Metals and Mining industry average of 24.13x and the peer group average of 34.87x according to market analysis. Even more compelling is its P/FCF ratio of 38.57, which, while higher than last year's 13.24, still looks reasonable given the company's cash flow trajectory according to financial metrics.

The price-to-book ratio of 5.63 (or 4.20, depending on the source) suggests the market is valuing AngloGold Ashanti's intangible assets-like its reserve base and operational expertise-well above its balance sheet according to stock analysis. But here's the kicker: with gold prices projected to hit $4,400–$5,055 per ounce in 2026 by JPMorgan and Goldman Sachs, the company's earnings and cash flow could easily justify a higher multiple according to market forecasts.

Strategic Capital Allocation: Shareholder-Friendly and Future-Proof

AngloGold Ashanti isn't just hoarding cash-it's deploying it smartly. Half of its Q3 free cash flow went to a $460 million dividend, a clear signal that management prioritizes shareholder returns according to financial reports. But the real genius lies in its capital allocation strategy: 50% of free cash flow is earmarked for dividends, while the remaining 50% funds strategic investments to extend mine life and boost production according to management guidance.

Take the Geita expansion: a $50 million investment to unlock new reserves is a fraction of the company's $3.9 billion liquidity pool, yet it could pay dividends for decades. This balance between near-term returns and long-term growth is rare in the mining sector and deserves a standing ovation.

Analyst Sentiment: A Consensus of Confidence

The Street isn't just nodding-it's cheering. As of November 2025, 81% of analysts have a "Buy" rating on AngloGold Ashanti, with a consensus price target of $89.76 (up 5.23% from the current $85.30) according to market data. JPMorgan doubled its price target to $128, citing gold's "structural bull case," while Citigroup initiated coverage with a $90 target, highlighting the Sukari mine's production ramp-up according to industry news.

Even the most cautious analysts aren't bearish. The lowest price target is $67.67, a 20% discount from current levels, but that's a stretch in a market where gold is already priced for perfection. With the Zacks Rank model giving AngloGold Ashanti a #1 (Strong Buy) rating, the chorus of optimism is hard to ignore according to financial analysis.

The Bottom Line: A Buy in a Golden Age

AngloGold Ashanti is a textbook example of a company that's "buying the rumor and riding the news." Its record free cash flow, disciplined capital allocation, and strategic investments position it to outperform as gold prices climb. While valuation metrics like P/FCF are stretched compared to historical averages, they're justified by the company's operational execution and the macroeconomic tailwinds fueling gold's rally.

If you're looking for a mining stock that combines near-term cash flow with long-term growth, AngloGold Ashanti isn't just a buy-it's a "buy and hold." The only question left is: How high will gold go? And if history's any guide, the answer is: higher than you think.