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Investing.com - Freedom Broker initiated coverage on Nintendo Co Ltd. (7974:JP) (OTC:NTDOY) with a Hold rating and a price target of JPY13,340.00 per share.
The price target reflects a 30x price-to-earnings multiple applied to Freedom Broker’s FY:28 EPS estimate of JPY390, plus JPY1,640 of cash per share.
Freedom Broker noted that Nintendo shares trade at a premium to the video game industry’s historical forward P/E multiple of 20x, but views this premium as justified given positive momentum heading into the Switch 2 cycle.
The research firm highlighted potential risks in Nintendo’s strategy, specifically mentioning "a steep price point and limited new software" for the upcoming Switch 2 console.
Despite these concerns, Freedom Broker acknowledged that Nintendo’s current business momentum supports the premium valuation compared to industry peers.
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