AngloGold Ashanti (NYSE:AU) has been downgraded to Market Perform from Outperform by BMO Capital Markets, with the broker citing the gold miner’s valuation following several years of share-price gains.
BMO Capital Markets is the investment banking arm of BMO Financial Group (TSX:BMO). BMO analyst Raj Ray has retained a US$115 ($160.43) price target for AngloGold.
According to Investing.com, BMO says AngloGold now trades at a meaningful premium to its estimate of net asset value after outperforming over the past three years.
InvestingPro data cited by the publication shows AngloGold shares returned 75.8% during the 12 months preceding the downgrade.
BMO says the company’s near-term operations remain broadly steady. The broker regards the Arthur Gold Project in Nevada, US, as a source of longer-term growth and expects third-quarter updates to provide further detail on brownfield opportunities, some of which are already reflected in its estimates.
The broker also describes AngloGold’s capital returns as competitive but expects the company to deploy its buyback of up to US$2 billion selectively at current valuations.
The rating change therefore reflects BMO’s assessment of AngloGold’s valuation rather than a material revision to its near-term operating outlook.
AngloGold Ashanti operates gold mines and development projects across Africa, Australia, and the Americas.
Write to France Pinzon at Mining.com.au
Images: AngloGold Ashanti
