Nintendo "1QFY3/27 estimates: weakness continues" (Neutral) Zhai

研报英文原文证据摘录

Nintendo "1QFY3/27 estimates: weakness continues" (Neutral) Zhai

ssure should be

From To % ch Cons.

partly cushioned by low-cost inventory procured in FY3/26, but this benefit likely fades in 03/27E 349.9 331.3 -5 346.1

FY3/28, adding OP downside if further price hikes are difficult. Although 2026 titles 03/28E 389.6 311.7 -20 406.1

such as The Legend of Zelda: Ocarina of Time Remake should draw attention, the 03/29E 398.5 303.8 -24 445.0

pipeline still lacks a clear blockbuster title to materially accelerate Switch 2 adoption,

with exclusive content likely expanding more meaningfully from 2027. Yijia Zhai

Analyst

yijia.zhai@ubs.com

Estimate change and valuation

+81-3-5208 6203

We have revised our shipment estimate based on the latest tracking and our estimates

Yanyi Songon pipeline. This has led to our decreasing assumption for hardware shipment, while for

Associate Analyst

software, we have revised down our estimate for Switch 2 shipment but revised up our yanyi.song@ubs.com

estimate for Switch 1 shipment. We are currently not assuming company to further +81-3-5208 6199

increase hardware price in FY3/28 while assuming the average cost per console to rise by

$40 in FY3/28.

The above mentioned changes have led to -1%/-21%/-26% change in our OP estimates

for FY3/27 to FY3/29. We are currently applying 14x EV/EBIT on our FY3/28E earnings,

which is close to industry average multiple. Our PT is decreased from ¥8,100 to ¥7,100

accordingly. However, we see potential downside to company’s multiple if the

company’s OP margin continues to receive negative pressure from hardware. We have

seen that in the past, when company’s OP margin was lower than the industry average,

its 1-year forward P/E or EV/EBIT multiple was as low as 16X and 12X, which could be the