Up 94% in a year, time to sell this $13 billion ASX 200 gold stock?

A leading expert recommends selling the high-flying ASX 200 gold stock. But why?

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S&P/ASX 200 Index (ASX: XJO) gold stock Evolution Mining Ltd (ASX: EVN) has made its shareholders plenty happy over the last 12 months.

A year ago, you could have bought shares for $3.29 apiece. Today, those same shares are changing hands for $6.38 each, up 93.9%, giving the company a market cap of $12.7 billion.

Now, the gains I quoted don't include the 12 cents per share in fully franked dividends Evolution Mining paid out (or shortly will pay out) over this time. Adding those back in, the accumulated gains come to 97.6%.

For some context, the ASX 200 is up 2.8% since this time last year.

In a better comparison with its peers, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) – which also contains some smaller miners outside of the ASX 200 gold stocks – has gained 44.6% in a year.

Evolution Mining has enjoyed a number of tailwinds.

Among those, the gold price has surged 35% over 12 months to currently trade for US$2,903 per ounce. Evolution also mines copper, and the copper price is up 14% in a year to US$9,734 per tonne.

The stock has also garnered ongoing investor attention after posting record-breaking half-year results (H1 FY 2025) and reiterating its full-year FY 2025 guidance of 710,000 to 780,000 ounces of gold at an all-in sustaining cost (AISC) of $1,475 to $1,575 per ounce.

But with Evolution Mining shares having gained more than twice as much as the All Ords Gold Index, Ord Minnett's Tony Paterno said it might be wise to take profits (courtesy of The Bull).

ASX 200 gold stock 'trading at a premium'

"The gold miner exceeded our expectations and consensus with a bumper first half earnings result in fiscal year 2025," said Paterno, who has a sell recommendation on the ASX 200 gold stock.

Commenting on Evolution Mining's half-year results, he said:

Record underlying profit after tax of $385 million rose 144% on the prior corresponding period. Earnings per share of 18.4 cents increased by 251%. Gold and copper production were up 22% and 36% respectively.

The strong first half performance amid an improving commodity environment has been reflected in a stronger share price. The shares have risen from $3.42 on July 1, 2024, to trade at $6.32 on February 27, 2025.

And therein lies the problem for the ASX 200 gold stock, according to Paterno.

"In our view, the valuation is stretched, with the company trading at a significant premium to peers. Investors may want to consider taking a profit," he said.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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