Nintendo shares rose 6.4% to a seven-month high. Goldman Sachs set a target price of 13,600 yen (up 26%). The launch of the Switch 2 (April 2) is expected to help revive hardware sales and user growth. Bloomberg reports that a phased game rollout strategy could help counter scalpers. Analysts say new software titles will drive a “new phase of growth.”
Shares of Nintendo Co. (TYO: 7974) surged by 6.4% on Wednesday, achieving their largest single-day increase since October 2023.
This jump followed Goldman Sachs’ decision to reinstate coverage with a “buy” rating and a 12-month price target of JPY 13,600.
Analysts point to the upcoming unveiling of the Switch 2 console on April 2 as a key factor that could boost Nintendo’s hardware sales and increase its active user base to unprecedented levels.
Goldman Sachs analysts Minami Munakata and Haruki Kubota emphasize the Switch 2’s ability to “unlock dormant hardware and users,” which addresses the declining sales of the original Switch.
The new console is expected to maintain the social gameplay emphasis of its predecessor while also introducing new software titles to drive long-term earnings growth.
Nathan Naidu from Bloomberg Intelligence points out that a staggered game release strategy could help avoid the scalping problems experienced with the original Switch, thereby ensuring consistent demand.
Nintendo’s stock has reached record highs in anticipation of the Switch 2 launch, indicating strong investor confidence in the company’s potential to duplicate the original Switch’s success (which sold over 140 million units).
Through software innovation and strategic rollouts, the company is targeting a “renewed growth phase” by fiscal year 2025.
