Nintendo Co, the Communication Services sector company, was revisited by a Wall Street analyst yesterday. Analyst Atul Goyal from Jefferies reiterated a Buy rating on the stock and has a Yen21,260.00 price target.
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Atul Goyal has given his Buy rating due to a combination of factors that, in his view, materially strengthen Nintendo’s investment case. He points out that recent U.S. data for December clearly contradicts the narrative that demand for Switch 2 is fading, showing that the new hardware led the market both in units sold and in revenue. He also notes that, despite launching mid‑year in June, Switch 2 still ranked as the top platform for full‑year 2025 in the U.S., underscoring robust underlying demand and strong market positioning. In addition, he emphasizes that the current share price around ¥10,000 offers an appealing risk/reward profile relative to his unchanged price target of ¥21,260, implying substantial upside potential.
At the business model level, Goyal highlights that Nintendo’s ecosystem is heavily skewed toward higher‑margin software, with roughly 90% of profits coming from software versus 10% from hardware. This profit structure, together with the strength of Nintendo’s installed base and content pipeline, cushions the company against concerns about higher memory and component costs in the new console cycle. As a result, he views the prevailing bearish worries about hardware cost pressures as exaggerated and not enough to offset the positive demand and profitability trends he observes. Collectively, these demand, margin, and valuation considerations underpin his decision to reiterate a Buy rating on Nintendo.