Nintendo Co., Ltd. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

It's been a good week for Nintendo Co., Ltd. (TSE:7974) shareholders, because the company has just released its latest half-year results, and the shares gained 2.9% to JP¥8,193. Revenue of JP¥523b surpassed estimates by 7.5%, although statutory earnings per share missed badly, coming in 43% below expectations at JP¥23.80 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Nintendo

Following the recent earnings report, the consensus from 23 analysts covering Nintendo is for revenues of JP¥1.35t in 2025. This implies a discernible 3.5% decline in revenue compared to the last 12 months. Statutory earnings per share are forecast to decrease 2.7% to JP¥274 in the same period. In the lead-up to this report, the analysts had been modelling revenues of JP¥1.37t and earnings per share (EPS) of JP¥283 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at JP¥9,013, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Nintendo, with the most bullish analyst valuing it at JP¥10,700 and the most bearish at JP¥5,800 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Nintendo shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 6.8% by the end of 2025. This indicates a significant reduction from annual growth of 2.7% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 8.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Nintendo is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Nintendo's revenue is expected to perform worse than the wider industry. The consensus price target held steady at JP¥9,013, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Nintendo going out to 2027, and you can see them free on our platform here.

We also provide an overview of the Nintendo Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.