Nintendo: Draglia Lost's Reasonable Success a Stepping Stone Towards Mario Kart Tour

Raising Nintendo's FVE to JPY 50,000 as the Switch Will Replicate the Success of the Wii

Unique User Experience and Third-Party Games Drive Switch’s Second Year; Raise FVE to JPY 56,000

Nintendo’s Guidance on Switch Shipment Looks Conservative; Shares Undervalued

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

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Equity Bottom-Up

<p>While we understand the market’s concern at the slowdown on Switch’s shipment momentum, we believe that the current share price is too pessimistic. We acknowledge that the market was disappointed as: 1) shipment of Nintendo Labo, launched in April, was weaker than expected; 2) Nintendo’s announcement at E3 suggests that no big titles will be released in summer 2018; and 3) Super Smash Bros Ultimate is coming later than the market’s expectation, and therefore, we may see a temporary slowdown on…</p>

While we understand the market’s concern at the slowdown on Switch’s shipment momentum, we believe that the current share price is too pessimistic. We acknowledge that the market was disappointed as: 1) shipment of Nintendo Labo, launched in April, was weaker than expected; 2) Nintendo’s announcement at E3 suggests that no big titles will be released in summer 2018; and 3) Super Smash Bros Ultimate is coming later than the market’s expectation, and therefore, we may see a temporary slowdown on…

Trim Nintendo FVE to JPY 51,000, but Share Price Decline Over-Reaction to Short-Term Disappointment