Nomura Securities Upgrades Nintendo (NTDOY) to Buy; Headed in Right LT Direction
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Nomura Securities upgraded Nintendo (OTC: NTDOY) from Neutral to Buy and raised its price target to JPY 32,000 from (JPY 15,200), saying it is headed in the right strategic direction from a longer-term perspective.
Analyst Junko Yamamura commented, "We think the success of Pokémon GO and the announcement of Super Mario Run heralds a change in earnings structure at Nintendo. We think the company's longerterm profit structure will be one in which operating profits from the online business provide support to medium-sized hits at the console business, which has a five-year cycle. We have changed our valuation methodology from P/E to DCF because we think prospects of stable, consistent operating profit growth have risen. We obtain our target price of ¥32,000 via a DCF model that assumes WACC of 6.4% and raise our rating from Neutral to Buy."
Shares of Nintendo closed at $31.22 yesterday.
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