• If you are wondering whether AngloGold Ashanti's share price still offers value after a strong run, this article walks through what the current valuation really says.
• The stock last closed at US$108.09, with returns of 9.1% over 7 days, 18.5% over 30 days, 26.3% year to date, and 305.4% over one year, which naturally raises questions about growth potential and changes in risk perception.
• Recent news coverage has focused on AngloGold Ashanti's position among global gold producers, including ongoing investor attention to how its operations and asset base compare with peers. This context has helped keep valuation front of mind for shareholders who are weighing whether the recent price performance still lines up with fundamentals.
• On Simply Wall St's 6 point valuation checklist, AngloGold Ashanti scores a 4 out of 6. This sets us up to look at traditional valuation tools such as P/E, P/B and discounted cash flow, and then finish with a more complete way of thinking about what the stock might be worth.

Approach 1: AngloGold Ashanti Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes estimates of the cash a company may generate in future years and discounts those amounts back to today to arrive at an estimate of what the business could be worth right now.

For AngloGold Ashanti, the model uses a 2 stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is about $2.22b, and analysts plus extrapolations provide a path of projected cash flows out to 2035. For example, the 2026 free cash flow input is $4.26b, and the 2035 projection used in the model is $3.86b, with intermediate years stepping between those figures.

Simply Wall St discounts each of these annual cash flows back to today and sums them, then adds a terminal value to estimate an intrinsic value of US$126.91 per share. Compared with the recent share price of US$108.09, the DCF output suggests AngloGold Ashanti trades at about a 14.8% discount, which points to a margin between price and this cash flow based estimate.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests AngloGold Ashanti is undervalued by 14.8%. Track this in your watchlist or portfolio, or discover 888 more undervalued stocks based on cash flows.

Approach 2: AngloGold Ashanti Price vs Earnings (P/E)

For a profitable company like AngloGold Ashanti, the P/E ratio is a useful way to relate what you pay for the stock to the earnings it currently generates. In simple terms, higher growth expectations or lower perceived risk often justify a higher P/E, while lower growth expectations or higher risk usually align with a lower P/E.

AngloGold Ashanti currently trades on a P/E of 24.24x. That sits below the peer average of 35.37x and also below Simply Wall St's Fair Ratio of 32.18x. It is, however, close to the Metals and Mining industry average P/E of 26.00x. The Fair Ratio is Simply Wall St's proprietary view of what a suitable P/E might be for AngloGold Ashanti, based on factors such as its earnings growth profile, industry, profit margins, market capitalization and company specific risks.

This Fair Ratio can be more informative than a simple comparison with peers or the sector, because it adjusts for the company’s own characteristics rather than assuming that all miners deserve the same multiple. With the actual P/E of 24.24x sitting below the Fair Ratio of 32.18x, AngloGold Ashanti screens as trading below that tailored benchmark.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your AngloGold Ashanti Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. These are simply your story about a company, linked directly to your own assumptions for fair value, future revenue, earnings and margins.

On Simply Wall St’s Community page, millions of investors use Narratives as an easy tool to connect a company’s story to a financial forecast and then to a fair value estimate that can be compared with the current share price.

That comparison, Fair Value versus Price, is what can help you decide whether a stock looks expensive, cheap, or roughly in line with your expectations at any given moment.

Narratives on the platform update automatically when fresh information arrives, such as new earnings reports or major news. This means your AngloGold Ashanti view can stay current rather than fixed at the moment you first ran the numbers. One investor might see AngloGold Ashanti as attractive only if their fair value is far above US$108.09, while another might require a much lower entry point based on a more cautious story and lower projected margins.

Do you think there's more to the story for AngloGold Ashanti? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.