According to a new finance report by Bloomberg, Nintendo shares are looking better after the COVID-19 outbreak, the company has now reached a new two-year record ahead of the potential second wave of COVID-19 infections.
“The stock had been struggling the past two months with demand for stay-at-home stocks dropping as the economy re-opened and the state of emergency in Japan was lifted,” said Katsuyuki Fujii, an analyst at Asunaro Investment. “But as fears for the second wave of coronavirus grow, people are taking a second look at those stocks.”
Nintendo certainly shared their concerns with COVID-19 ahead of an already tough year for the company, but Nintendo counts on two big selling points that helped alleviate the repercussions of the pandemic disease. The introduction of the Nintendo Switch Lite and the launch of Animal Crossing: New Horizon.
As the world has been forced to isolate at their homes, Nintendo Switch became a very interesting source of entertainment for new buyers, Nintendo informed investors that, as of March 31st, the Nintendo Switch has sold 55.77 million units worldwide. 356.24 million software units have also been sold worldwide. This has helped the company to be close to reaching a 12-year high in the appreciation of their shares.
PMorgan analyst Haruka Mori on June 10 raised her price target for Nintendo by 18% to 52,000 yen, saying that the Covid-related demand growth didn’t look temporary. “We believe the Covid-19 pandemic has expanded earnings opportunities for the Nintendo Switch platform beyond one-off special demand,” Mori wrote.
While all the analyst claims Nintendo is doing and will continue having a very positive 2020, the Kyoto based company has warned their investors that COVID-19 will have a severe impact that will be reflected on their March 31, 2021, report. The company forecast a 9.6 percent drop in Switch and Switch Lite sales, and 17 percent in software sales.
Source: Bloomberg
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