JPM-AngloGold Ashanti Significant re-rating cash returns potential...-20250806

We raised AngloGold Ashanti (OW) to our EMEA Gold Miners top pick with ourQ2’25 Into the Print (link) & placed on Positive Catalyst Watch; ANG shares are+19% vs major gold peers +7-24% since 15 July. Nevertheless, we still seesignificant re-rating potential vs peers. JPM Commodities Research forecast goldprices to rise ~20% to >$4,000/oz by mid-2026, with Fed rate cuts a possiblecatalyst to drive central bank purchases and gold ETF inflows. For ANG, we stillestimate the stock trading at a ~15-20% discount on 2025/26E EV/EBITDA vsmajor global gold peers despite offering ~10% FCF yield (peer avg ~7%) andpotential to return ~7% of its mkt cap by Q4’25 results. Revisiting JPM’sconviction back in 2022, with ND/EBITDA back at zero, we believe share buybacks should form part of ANG’s capital distribution arsenal. Recent Russell indexinclusion and future development of its Nevada projects should help close thevaluation gap vs peers in our view. Factoring for Q2 results we revise 2025/26EEBITDA +4%/5% and sit +3%/+8% vs consensus. We raise our Dec’26 PTs toUS$70/sh (prev US$63/sh) & ZAR127/sh (prev ZAR114/sh), indicating ~25%upside, and reiterate AngloGold as our Top Pick among the EMEA Gold Miners.

•Bullish gold outlook, JPMe >$4,000/oz in 2026. JPM Commodities Researchmaintain a positive outlook for gold (link), forecasting >$4,000/oz in Q2’26(+20% vs spot). They expect US rate cuts should drive gold ETF inflows andforecast $3,675/oz at Q4’25 (+9% vs spot).

•Nevada offers long-term upside, NPV upgrade with longer Geita mine life.ANG recently acquired Augusta Gold (Not Covered) for ~$110m, which ownsconcessions near ANG’s existing projects in Nevada’s Beatty District. Thisconsolidates ANG’s regional footprint, complimenting its North Bullfrog andArthur projects in the region. North Bullfrog is at pre-feasibility stage andalthough we only value the project at ~$200m NPV today, with >16Moz of totalresources and Franco-Nevada (Not Covered) acquiring a 1% royalty for ~$250m (link), we expect ANG’s Nevada district offers significant value upsidepotential. After adjusting our model, we forecast Geita to produce ~500koz pato ~2035, driving a ~10% increase to our group NPV to $31/sh.