A little over a week ago I published a chart of analyst share price targets for Nintendo when it traded over ¥45,000 for the first time ever. Since then, it has received another raised target; a survey showed it outsold the PS3 six-to-one in Japan; and it last closed at ¥48,000, up nearly 7%.
Nintendo (JP: 7974) (OTCPK:NTDOY) gained 2.8% to ¥48,000 ($48.90 ADR equiv. at 122.7/$1) on Wednesday. In early trading Thursday, its ordinary shares are up another 2.5% to ¥49,200 ($50.12 ADR equiv.).
It looks like aggressive buying ahead of an expected guidance boost. In the very least, Nintendo will have to adjust to the upside given the weak yen.
Below is an excerpt of analyst commentary on Nintendo from "Wii and Nintendo are Hot Buys, But Can the Good Times Continue?" in Wednesday's WSJ Heard in Asia.
I. Hiroshi Kamide, KBC Securities
"I don't think [Nintendo] is going to double from here, at least for the time being, but this year is going to be quite good."
- Estimates quarterly (April-June) operating profit +~60% to ¥45.8b, on sales growth of 52% to ¥199.2b
- "buy" rating
II. Atul Goyal, CLSA
"With a business model that is tantamount to a money avalanche, Nintendo always looks cheap."
- Compared Nintendo with Apple's (NASDAQ:AAPL) share price appreciation after launching the iPod
- Has the highest share price target at ¥80,000
III. Jay Defibaugh, Credit Suisse
"It's the valuations really....It's quite pricey."
- Calculates Nintendo is trading at 25x expected earnings vs. 19x for rival Sony (JP: 6758) (NYSE:SNE)
- "neutral" rating on Nintendo, "outperform" rating on Sony
See below for an updated version of my earlier chart on analyst share price targets for Nintendo. This chart includes Macquarie's target. The potential up/downside percentages are updated as well.
Click to enlarge chart
Lastly, see a one-year chart of Nintendo (JP: 7974).
Disclosure: The author does not own shares of any companies mentioned in this article.