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Barron's Predicts Strong Nintendo Growth to Resume This Year

| 20 Apr 2009 19:02
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Despite the recent slide in Nintendo share prices, Barron's says investors are ignoring the company's strengths and predicts that "strong growth" should resume later this year.

Nintendo's share price has been hit hard by slowing hardware sales and a reduced profit forecast, according to a Reuters report, a situation made even worse when the PlayStation 3 outsold the Wii in Japan in March, the first time Nintendo's platform has been knocked off the top spot in well over a year. In January, Nintendo revised its profit forecast for 2008, slashing the amount by a third to roughly $2.5 billion, a move analysts at the time described as "baffling and potentially very worrying." Nintendo President Satoru Iwata himself said the Wii is in "the most unhealthy condition since it hit the Japanese market."

But while some observers are contemplating the possibility of a Nintendo crash, financial magazine Barron's said other analysts have predicted that the company actually beat profit forecasts, earning up to $5.6 billion in operating profit, and are saying that earnings will "rise sharply" in the 2010 fiscal year. The report also noted that investors are "ignoring Nintendo's strong balance sheet, its capacity for boosting its dividend and shares that are priced reasonably relative to the company's projected growth." As a result, the company's "strong growth" should resume this year.

In other words: Keep your fork handy, but don't stick it into Nintendo just yet.

via: Gamasutra

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