Shares of Nintendo Ltd/ADR NTDOY were on the rise again Thursday after an upgrade from Wedbush following the company’s announcement of the handheld Nintendo Switch Lite.
The Analyst
Michael Pachter upgraded Nintendo from Neutral to Outperform and boosted the target price for the Tokyo-listed stock from ¥38,000 ($351.16) to ¥49,000 ($452.81).
The Thesis
Investors clearly like the idea of cheaper Switch Lite, Pachter said in a Wednesday note. (See his track record here.)
Shares of Nintendo on the U.S. OTC market and in Japan rose sharply after Kyoto-based Nintendo’s Wednesday announcement that it will launch the Lite in September.
“We expect the introduction of the Nintendo Switch Lite to drive hardware and software sales well above FY:20 guidance and maintain the company’s positive momentum into FY:21,” the analyst said.
The Lite will have a suggested retail price of just under $200, compared with about $300 for the Nintendo Switch, and Pachter said the lower price will drive sales, along with a strong catalog of Switch games that will be playable on the new device.
Wedbush is betting on the release of the mobile "Mario Kart Tour" this summer as a positive for Nintendo’s stock price.
Price Action
Nintendo OTC shares were up 0.73% at $48.35 at the time of publication Thursday.
Related Links:
Nintendo May Move Production Out Of China Amid US-China Trade Dispute
Photo courtesy of Nintendo.
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