Credit Suisse slashes target price for Allied Minds

Analysts at Credit Suisse slashed their target on shares of Allied Minds, telling clients they were still waiting for the commercial proof points from the company and pointed out its ongoing rate of 'cash burn'.

In a research note sent to clients, the Swiss broker took its target for the shares from 175p to 110p, while retaining a 'neutral' recommendation for the stock.

The reasons for their decision on the former were lower valuations across the firm's peer group, a decline in its Group Subsidiary Ownership Adjusted Value, less cash held at parent level and stronger cable.

"Still waiting for commercial proof points [...] As highlighted at CMD, management is focused on getting the top 6 subsidiaries closer to commercialization or milestones to allow it to exit at a premium valuation.

"In that context, we continue to wait to hear about first commercial contract wins for Federated Wireless (contingent upon FCC approval) and HawkEye at some point during 2018," they said.

As for the company's cash burn, going forward Credit Suisse expected it to decline from the between $90m to $100m per year seen over the past two years to about $80m per year.

At present, the early state technology start-up investors was holding $169m of net cash, with $84m of that at the parent level and another $85m at the subsidiary level.