Nintendo Switch Market Expectations “Turned from Robust Growth to No-growth” in Three Months, Bullish Nintendo Analyst States

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Market expectations, as reflected in stock price, for the Nintendo (TYO:7974) Switch have turned from healthy growth to no-growth in a matter of three months.

At least, that’s what Wall Street’s most bullish Nintendo analysts, Jefferies' Atul Goyal, wrote to investors as covered by website Business Insider.

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"Market expectations for Switch, as reflected in stock price, have turned from robust growth to no-growth in a matter of three months," the analyst wrote to investors.

"We believe continued sales of Switch over the course of this year and next could very well prove this current thesis of Switch being ex- growth wrong as well," he added.

"But given the sustained selling pressure, perhaps the short-term market is right about Nintendo (for a change) and perhaps it doesn’t grow in hardware sales."

While Goyal has lowered his Nintendo forecast, the analyst remains somewhat positive about the Japanese gaming behemoth.

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"No other company in our coverage is experiencing such growth and trading at such low multiples," he wrote.

"Nintendo Switch has only 1 year in the bag and 4-5 years more to go, with benefits from cycle and structural (digital) upside. Mobile, China, Online are some other potentially large drivers."

The Nintendo Switch was released globally in March 2017. Back in April of this year, Nintendo reported to have sold 17.78 million Switch units, alongside over 68 million total game sales.

It's an interesting approach, from an analyst basically stating that they still think they're right but in the face of market trends it may be wise to revisit their previously high price target (JPY 71,200) down to 64,200 Yen. To be clear, they're still bullish. Nintendo stock currently sits at 37,540 Yen so this represents about a 70% premium. We'll see if it materialises or not.