Nintendo Co., Ltd. (TSE:7974) just released its first-quarter report and things are looking bullish. Nintendo delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting JP¥518b-19% above indicated-andJP¥128-106% above forecasts- respectively Earnings are an important time for investors, as they can track a company’s performance, look at what the analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.
Following the latest results, Nintendo’s 27 analysts are now forecasting revenues of JP¥2.34t in 2027. This would be an okay 3.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to sink 10% to JP¥371 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥2.33t and earnings per share (EPS) of JP¥347 in 2027. So the consensus seems to have become somewhat more optimistic on Nintendo’s earnings potential following these results.
Check out our latest analysis for Nintendo
The consensus price target was unchanged at JP¥10,172, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. There’s another way to think about price targets though, and that’s to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Nintendo at JP¥21,260 per share, while the most bearish prices it at JP¥5,000. So we wouldn’t be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn’t rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Nintendo’s past performance and to peers in the same industry. The analysts are definitely expecting Nintendo’s growth to accelerate, with the forecast 5.0% annualised growth to the end of 2027 ranking favourably alongside historical growth of 2.6% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.2% annually. Factoring in the forecast acceleration in revenue, it’s pretty clear that Nintendo is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Nintendo following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at JP¥10,172, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Nintendo going out to 2029, and you can see them free on our platform here.
You should always think about risks though. Case in point, we’ve spotted 1 warning sign for Nintendo you should be aware of.
Valuation is complex, but we’re here to simplify it.
Discover if Nintendo might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Have feedback on this article? Concerned about the content?Get in touchwith us directly.Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
About TSE:7974
Nintendo
Develops, manufactures, and sells home entertainment products in Japan, the Americas, Europe, and internationally.
Flawless balance sheet average dividend payer.
Similar Companies
-
NEXON
-
Koei Tecmo Holdings
Market Insights
What Korea’s market says about your index fundMitchell Lawler
What does frontier-beating open sector might be its most misreadMitchell Lawler
Advertisement
Weekly Picks
Ceazaron Sparc AI·4 months ago
When GPS fails: this small cap is fixing a $54B drone problem
Fair Value:CA$5.2533.3% undervalued
159followersusers have followed this narrative
·0commentsusers have commented on this narrative
·27likesusers have liked this narrative
HA
HarishPKon Amdocs·about 2 months ago
Why Amdocs is a high conviction Buy for me?
Fair Value:US$82.0328.6% undervalued
36followersusers have followed this narrative
·3commentsusers have commented on this narrative
·12likesusers have liked this narrative
IV
Ivoedon SBM Offshore·about 1 month ago
Why SBM Offshore’s €30 Share Price May Be Too Harsh On Its Backlog
Fair Value:€44.527.2% undervalued
20followersusers have followed this narrative
·0commentsusers have commented on this narrative
·5likesusers have liked this narrative
CL
Clive_Thompsonon Green Tea Group·13 days ago
One of China’s Fastest-Growing Restaurant Chains Trades on Just 7x Earnings and an 8% Dividend
Fair Value:HK$8.723.9% undervalued
47followersusers have followed this narrative
·3commentsusers have commented on this narrative
·20likesusers have liked this narrative
RecentlyUpdated Narratives
JRYon Bloom Energy·about 1 hour ago
The Bloom Story is early days
Fair Value:US$386.143.2% undervalued
1followerusers have followed this narrative
·0commentsusers have commented on this narrative
·0likesusers have liked this narrative
CH
ChuckNon NextEra Energy·about 5 hours ago
Investor Thesis: Why the NextEra Energy / Dominion Energy Merger Could Be a Major AI Power Infrastructure Event
Fair Value:US$93.719.7% undervalued
23followersusers have followed this narrative
·0commentsusers have commented on this narrative
·0likesusers have liked this narrative
TA
Taloson Voyager Technologies·about 5 hours ago
The “Landlord of Orbit” – A Deep Value Play Ahead of the Starlab Era
Fair Value:US$385.289.1% undervalued
27followersusers have followed this narrative
·0commentsusers have commented on this narrative
·0likesusers have liked this narrative
Popular Narratives
oscargarciaon NVIDIA·2 months ago
The company that went from selling GPUs to gamers to becoming the AI arms dealer of the 21st century.
Fair Value:US$28020.0% undervalued
281followersusers have followed this narrative
·9commentsusers have commented on this narrative
·16likesusers have liked this narrative
CU
CubanEroson Microsoft·about 1 month ago
A wonderful business at reasonable price.
Fair Value:US$419.9119.1% overvalued
143followersusers have followed this narrative
·0commentsusers have commented on this narrative
·8likesusers have liked this narrative
KI
KiwiInveston Amazon.com·3 months ago
Amazon’s high growth, high tech segments propel its profits, while traditional segments plod along
Fair Value:US$475.0942.2% undervalued
166followersusers have followed this narrative
·1commentusers have commented on this narrative
·8likesusers have liked this narrative
