Market players gravitated to Nintendo (NTDOY 3.26%) stock at the close of the trading week following the initiation of coverage by a major bank. This helped push the storied video game company's stock more than 3% higher on Friday, easily beating the S&P 500 index's nearly 0.3% decline.
The initiating party was one of the "big four" American banks -- JPMorgan Chase. Before market open, the bank's analyst Junko Yamamura kicked off coverage of Nintendo's Japan-listed stock with an overweight -- buy, in other words -- recommendation at a price target of 11,600 yen ($74.21) per share. That suggests potential upside of 17% over the stock's current level.
The reasoning behind Yamamura's bullish take on Nintendo wasn't immediately apparent. It comes at a time when many eyes are on the company, as it just took the wraps off its long-awaited Switch 2 hybrid video game system. The product is sure to be an improvement over the original -- and highly popular -- Switch, released in early 2017.
Following Nintendo's reveal, several analysts became more bullish about the company's prospects, not least due to anticipated Switch 2 sales.
Unless Nintendo completely drops the ball, Switch 2 should be a strong seller. The original Switch has sold over 146 million units, which by any standard constitutes a runaway success; so far, there's little reason to believe the sequel will be any less popular.
I don't think Nintendo will flub this, as the Switch 2 is far too important to its future to fail. It also remains a unique product in a video game world dominated by traditional consoles. I'd be bullish on its potential, too.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.