Nintendo’s Resilience and Strategic Growth Amidst Tariff Challenges: A Buy Recommendation

Citi analyst Tokiya Baba maintained a Buy rating on Nintendo Co (NTDOF – Research Report) yesterday and set a price target of Yen13,200.00.

Tokiya Baba has given his Buy rating due to a combination of factors that highlight Nintendo’s resilience despite potential challenges. Although the anticipated U.S. tariffs are expected to significantly impact Nintendo’s gross profits in the coming fiscal years, Baba emphasizes the company’s strategic strengths, particularly the ‘three arrows’ approach. This strategy includes the improved profit margins from the upcoming Nintendo Switch 2, the planned release of a more affordable Switch Lite 2, and a strong lineup of software titles, all of which are expected to bolster the company’s performance.
Despite the negative financial impact of tariffs, Baba believes that Nintendo’s growth drivers remain robust. The company’s ability to mitigate tariff impacts and capitalize on medium-term growth opportunities, such as the concurrent sales of existing devices, supports the Buy rating. Additionally, the market appears to underestimate Nintendo’s resilience, as reflected in the current share price. Consequently, Baba maintains a positive outlook on Nintendo’s future prospects, even as the target price is adjusted to reflect revised forecasts.

In another report released on May 19, Benchmark Co. also maintained a Buy rating on the stock with a Yen13,000.00 price target.