Nintendo Switch Table Top.jpg

Reports about the success of the Switch continue to appear on a daily basis, but one Wall Street Nintendo analyst has warned sales could begin to slow for the Japanese company. Jefferies analyst, Atul Goyal, has cut his forecast for Nintendo's stock price by more than 10 percent, from a target of ¥71,200 ($640.45) down to ¥64,200 ($577.48).

Nintendo's stock has lost more than 12 percent in 2018 and currently sits at around ¥38,000 ($341.83). While it has begun to recover - with a four percent increase in June - it would still need a 69 percent increase to reach Goyal's lower target.

The analyst said the current market expectations reflected in the stock price, had gone from robust growth to no-growth within a period of three months. Although he remained optimistic about this year and next year, he stated how it could still go either way:

Given the sustained selling pressure, perhaps the short-term market is right about Nintendo (for a change) and perhaps it doesn’t grow in hardware sales.

Despite the current belief the success of the Switch is based on ex-growth, Goyal noted how no other company had experienced growth and trading at such low multiples: 

Nintendo Switch has only 1 year in the bag and 4-5 years more to go, with benefits from cycle and structural (digital) upside. Mobile, China, Online are some other potentially large drivers.

Back in April, he also said Nintendo had the cheapest game stock in the world, following its third-quarter results

[source markets.businessinsider.com]