Nintendo Co., Ltd. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Nintendo Co., Ltd. (TSE:7974) just released its interim report and things are looking bullish. Nintendo delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting JP¥527b-13% above indicated-andJP¥88.39-43% above forecasts- respectively Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the most recent consensus for Nintendo from 27 analysts is for revenues of JP¥2.37t in 2026. If met, it would imply a huge 36% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 7.4% to JP¥340. In the lead-up to this report, the analysts had been modelling revenues of JP¥2.25t and earnings per share (EPS) of JP¥321 in 2026. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

View our latest analysis for Nintendo

Despite these upgrades,the analysts have not made any major changes to their price target of JP¥14,399, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Nintendo analyst has a price target of JP¥20,840 per share, while the most pessimistic values it at JP¥10,000. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. For example, we noticed that Nintendo's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 85% growth to the end of 2026 on an annualised basis. That is well above its historical decline of 3.6% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 5.1% per year. Not only are Nintendo's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Nintendo's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Nintendo going out to 2028, and you can see them free on our platform here.

You can also see our analysis of Nintendo's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.