FY3/27 investment focus: awaiting new titles; stock may draw renewed interest

研报英文原文证据摘录

FY3/27 investment focus: awaiting new titles; stock may draw renewed interest

offset by price hikes for Switch 2

Payout ratio(%, 3/27E) 60.1 hardware over the near term. We are encouraged by the stance NintendoEquity ratio(%, 3/27E) 80.0

BPS(¥, 3/27E) 2,689.9 has shown for dealing with this issue. Our FY3/28 forecasts factor in the risk

PBR(x, 3/27E) 2.7 of further cost rises to some degree, but our focus is on Nintendo’s scopeROE(%, 3/27E NP basis) 13.3

ROA(%, 3/27E RP basis) 14.4 for the kind of cost cuts it is advocating (including design changes). 2) We

Note: No. of shares includes treasury stock believe the market has already reacted negatively to weak guidance (sales

Absolute and TOPIX-relative share price volume targets). 3) We are upbeat on the long-term strength of the Switch

1, which we view as a major change/upturn from a cyclical perspective. In

terms of IP strategy too, the second Mario movie has been a major hit, and

with this in mind we think sustained positives have actually increased. With

an upturn in expectations for the Switch 2 (medium-term outlook), we think

the stock could easily undergo a re-rating.

WATCH: Our FY3/27–FY3/28 forecasts

We lower our OP forecasts for FY3/27 and FY3/28, mainly to reflect our

downwardly revised sales volume assumptions for Switch 2 software titles.

(See page 2 for more on this.)Senior Analyst Takeshi Koyama

+81 3 6202 8265 takeshi.koyama@mizuho-sc.com MEASURE: Lowering price objective to ¥12,300 but reiterating Buy

Our price objective (¥12,300) is based on an adjusted PER of about 25x Click here for ESG on

and our FY3/28 EPS estimate (after taking into account net cash and other our entire coverage

factors). We previously applied a multiple of around 30x, the upper end of the