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AngloGold Ashanti Gets Upgrades as Gold Fields Gets Downgrade

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Jun. 27 2019, Updated 11:11 a.m. ET

BMO Capital upgrades AngloGold Ashanti

Today, BMO Capital Markets upgraded AngloGold Ashanti (AU) from “market perform” to “outperform” and raised the stock’s target price from $16 to $21. The bank believes that AU has a solid track record and is on track to get its Obuasi mine operational by the end of the year. AngloGold’s Obuasi mine in Ghana, which has been on a care and maintenance pause for the last four years pending the commencement of the redevelopment project, is now set to produce its first gold by the end of 2019.

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BMO is more constructive on gold’s outlook

After gold’s recent run, BMO has become more constructive on the metal. BMO’s brighter outlook for gold also underpins its bullish call on AngloGold. AU’s stock has risen by 51.6% in the last one month as compared to the SPDR Gold Shares’ (GLD) return of 11% and the VanEck Vectors Gold Miners ETF’s (GDX) gain of 25.5%. This outperformance is not surprising given that miners are usually leveraged bets on gold and tend to amplify gold’s performance both on the up and the downside. To learn more about gold’s outlook, read A Perfect Storm for Gold: All Macro Drivers Align.

RBC upgrades AngloGold and downgrades Gold Fields

RBC Capital also upgraded AngloGold Ashanti from “sector perform” to “outperform” yesterday. On the same day, RBC Capital downgraded Gold Fields (GFI), another South Africa based miner, from “outperform” to “sector perform.” The firm believes that the upside for the stock could be limited given that it has run ahead of its peers in the last three months. GFI stock has gained 34.5% in the last three months as compared to gains of 0.4%, 9.8%, and 24.4% in Sibanye Stillwater (SBGL), Harmony Gold (HMY), and AngloGold Ashanti (AU), respectively.

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