Nintendo Co (NTDOF) has received a new Buy rating, initiated by Citi analyst, Tokiya Baba.
Tokiya Baba has given his Buy rating due to a combination of factors that suggest strong future growth for Nintendo Co. The introduction of the Nintendo Switch 2 is anticipated to drive significant profit growth, despite initial concerns about its higher price point potentially affecting sales. Baba believes that the market has not fully accounted for the profit potential from a future lower-priced model, tentatively called the Switch Lite 2, which is expected to complement the company’s extensive software lineup.
Furthermore, Tokiya Baba projects a clear increase in profits starting from FY3/26, with substantial growth in both hardware and software sales anticipated by FY3/27. The forecast includes robust sales figures for the Switch 2, with expectations of selling millions of units annually over the next few years. The anticipated release of a more affordable model is seen as a strategic move to broaden the consumer base and enhance sales, reinforcing the Buy rating with a projected share price return of 15.3%.
In another report released on April 28, Jefferies also maintained a Buy rating on the stock with a Yen15,580.00 price target.