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

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

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Nintendo's Revised Guidance Is Above Our Expectations, and We Still Expect a Room to Go Up

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

Nintendo (7974) - Is Perfection Good Enough?

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

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Equity Bottom-Up

<p>We raise our fair value estimate for Nintendo to JPY 56,000 from JPY 50,000, as we revise our lifetime shipment assumption of Nintendo Switch to 115 million consoles from 110 million. Since its launch in March 2017, the first 10 months’ shipment of Switch hardware has matched that of Wii, which was the largest console throughout Nintendo’s history, and shipped 102 million units in its lifetime. Nintendo succeeded giving traction to Switch shipment on its introductory year by leveraging its IPs…</p>

We raise our fair value estimate for Nintendo to JPY 56,000 from JPY 50,000, as we revise our lifetime shipment assumption of Nintendo Switch to 115 million consoles from 110 million. Since its launch in March 2017, the first 10 months’ shipment of Switch hardware has matched that of Wii, which was the largest console throughout Nintendo’s history, and shipped 102 million units in its lifetime. Nintendo succeeded giving traction to Switch shipment on its introductory year by leveraging its IPs…

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