Nintendo Shares Soar on New Switch Game Launches – Barron’s
Nintendo (7974.JP) is keeping up recent momentum in its share price with a slew of new announcements at this week’s Electronic Entertainment Expo in Los Angeles.
The Kyoto-based video games giant’s stock was up as much as 3.2% in Tokyo trading Wednesday morning, taking Nintendo’s total return for the year-to-date to 43%. The Nikkei 225 index is up just 4.5%.
This morning’s rise came on the back of Nintendo revealing a number of new titles for its recently-launched Switch system. These include a new game based on the hugely popular ‘Pokemon’ franchise, as well as titles based on fan favorite series like ‘Yoshi’ and ‘Metroid.’ ‘Super Mario Odyssey,’ the next big game to star the iconic mustachioed plumber, will hit the Switch console on October 27. “We view the news as favorable for the Switch,” says Nomura analyst Junko Yamamura.
The Switch has been an unexpected hit for Nintendo, which has struggled to replicate the success of its previous ‘Wii’ system, which allowed players to use motion control. The Switch lets players use the system both at home and on the move via a detachable screen. Nintendo is aiming to ship almost 13 million units of the Switch system by the end of March next year. That would be about the same number it shipped of the console’s immediate predecessor, the ‘Wii U,’ in its entire lifespan.
Despite the rally Nintendo’s stock trades at only 40 times next 12 month’s earnings. That’s still a big discount to its average valuation of 50 times over the last five years.