Michael Pachter: Don’t Get Your Hopes Up for Nintendo Earnings

According to analyst Michael Pachter at Wedbush Morgan, Nintendo (PINK:NTDOY) will probably disappoint investors.

Here’s Pachter’s bullet points for a preview of Nintendo’s earnings announcement:

  • After the close of the Tokyo Stock Exchange on Thursday, January 27 (4:00pm Tokyo / 2:00am ET), Nintendo will report fiscal Q3 2011 (ending December) results.
  • We expect Nintendo to report results below our estimates for revenue of 510 billion and EPS of 642, and close to the consensus estimates of 465 billion and EPS of 552.
  • We expect Nintendo to maintain FY:11 guidance.
  • The 3DS will be released in Japan on February 26 (at 25,000), on March 25 in Europe (at a retailer-defined price), and on March 27 in the US (at $250).
  • We expect that the release of the 3DS to be a catalyst offsetting weak guidance and unfavorable F/X.
  • Maintaining our NEUTRAL rating and 22,000 Yen price target, which reflects a forward P/E multiple of 10x our FY:12 adjusted EPS estimate of 1,300, plus 9,000/share in cash.

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