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Positive Outlook for Nintendo Co. with Anticipated Success of Switch 2 Launch

Positive Outlook for Nintendo Co. with Anticipated Success of Switch 2 Launch

Jefferies analyst Atul Goyal maintained a Buy rating on Nintendo Co today and set a price target of Yen20,780.00.

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Atul Goyal has given his Buy rating due to a combination of factors that suggest a positive outlook for Nintendo Co. The anticipated launch of the Switch 2 is expected to mirror the successful trajectory of the original Switch, with strong initial sales driven by hardware demand and seasonal boosts during the holiday period. Historical data from the launch of the original Switch indicates that the first quarter operating profit was a significant portion of the annual figure, and similar performance is expected with the new console.
Moreover, while hardware margins are relatively low, the software margins are substantially higher, which could contribute positively to the overall profitability. Goyal anticipates that the operating profit for the first quarter following the Switch 2 launch will align with historical trends, projecting a notable increase. These factors combined support the Buy rating, as they indicate a strong potential for growth and profitability in the upcoming fiscal periods.

Goyal covers the Communication Services sector, focusing on stocks such as Nintendo Co, Capcom Co, and NEXON Co. According to TipRanks, Goyal has an average return of 14.1% and a 68.82% success rate on recommended stocks.

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