Nintendo (NTDOY) is rated STRONG BUY due to the record-breaking success of the Switch 2 and robust long-term IP strategy. Switch 2 sales have shattered industry records, with 10.36 million units sold in four months and a revised forecast of 19-20 million for FY26. NTDOY's software sales are booming, driven by hits like Mario Kart World, Donkey Kong Bananza, and Pokémon Legends: Z-A plus strong third-party support.
Nintendo Co. Ltd. enjoys high Switch 2 sales and stable margins despite stubborn inflation and pricing criticisms. It excels at giving surprising and unending gaming innovations while ensuring product compatibility and digital exclusivity to maintain high customer loyalty. Well-positioned fundamentals ensure that it can sustain its continued digital innovation, upscaled production, and expansion.
Nintendo's Switch 2 cycle is off to a record start, selling 10.36 million units in five months. Operating margins fell as hardware mix and spending on R&D and advertising increased. Management raised full-year guidance to 19 million Switch 2 units and ¥2,250 billion in sales.
Nintendo is betting big on its new console, raising its sales forecast for the Switch 2 to 19 million units for the year ending March 2026, up from 15 million previously, as excitement builds ahead of the holiday rush. The Kyoto-based company also lifted its annual operating profit target by 16% to 370 billion yen ($2.45 billion), buoyed by stronger-than-expected demand for its hybrid home-and-handheld device, which launched in June.
The Japanese company now forecasts fiscal-year revenue to increase 93% and net profit to climb 25.5%.
Nintendo (OTC:NTDOY, TYO:7974) was downgraded by Wedbush to ‘Neutral' from ‘Outperform,' with analysts stating this reflects expectations that Nintendo's recent gains are already priced in the best-case scenario for Switch 2 hardware and software sales in the coming quarters. The analysts maintained their price target of ¥14,000, slightly above Nintendo's current share price of ¥13,535.
Nintendo Switch 2 achieved a record-breaking launch, selling 5.82 million units in June and easily outpacing initial forecasts. Mario Kart World's stellar attach rate and sales momentum led to my raised forecast of 14 million units sold by fiscal year-end. Nintendo's strong software pipeline, retail expansion, and Donkey Kong IP revitalization position the company for sustained growth.
Nintendo opened the year with 131% sales growth with maintained profitability, driven mainly by Switch 2. Tariffs, inflation, and pricing criticisms are some challenges surrounding the company, but its strong brand recognition remains unfazed. Product compatibility and exclusivity ensure that gamers are still locked in the Nintendo gaming ecosystem.
Nintendo's Switch 2 launch drove a 132% YoY sales surge, but margins compressed due to hardware mix and launch costs — typical for new console cycles. Despite blowout demand, Nintendo maintains conservative guidance, suggesting full-year Switch 2 sales should easily surpass targets, especially with the Christmas quarter ahead. My long-term model forecasts robust free cash flow growth, but at current valuations, Nintendo appears at best fairly valued with a limited margin of safety.
Nintendo is raising the price of its original Switch consoles and other products, effective Aug. 3. The decision was made "based on market conditions," Nintendo said.
Nintendo on Friday said quarterly revenue had more than doubled year-on-year thanks to the Switch 2, which became the world's fastest-selling console after its launch in June.
Sales of Nintendo's new Switch 2 now total 5.82 million units, the company said Friday. In this article 7974.T-JP