Nintendo Drops in Tokyo After SMBC Nikko Cuts Recommendation

Nintendo Co. fell the most in two months in Tokyo trading after SMBC Nikko Securities Inc. cut its recommendation and said it now expects the company’s entry into smartphone games won’t make full contributions to revenue until the year ending March 2018.

The video game maker’s shares dropped 7.6 percent as of the close in Tokyo, the biggest decline since Oct. 29. The benchmark Topix index fell 1.1 percent.

Operating income for the fiscal year starting April 1 will probably be about 30 billion yen ($253 million), less than half the previous estimate, because of reduced sales volume for the 3DS handheld player and revised assumptions about smartphone games, Eiji Maeda, an analyst at SMBC Nikko, wrote in a report released Tuesday. He lowered his rating on the shares to underperform from neutral.

Nintendo has previously delayed the debut of its joint project with online games platform operator DeNA Co. While the company owns intellectual property including Mario and Zelda, the first game will be a free-to-play messaging-based application called Miitomo, which will have “few in game charges,” Maeda wrote.

Nintendo shares rose 33 percent last year, fueled by its March announcement that the company was entering the smartphone game market. Earlier in 2015, the stock was up as much as 80 percent before the smartphone delays raised doubts about its ability to compete in the fast-moving, competitive market for free-to-play games.

Source: http://www.bloomberg.com/news/articles/2016-01-06/nintendo-drops-in-tokyo-after-smbc-nikko-cuts-recommendation

Title Source: http://www.neogaf.com/forum/showthread.php?t=1167012

It's just another stock market correction ...

I always believed that Nintendo was being overvalued since their announcement to partner with DeNA ...

Actually "general market" and media was expecting 3D Mario Land type games (which is not realistic) and this can be reflected in many sites news. Now they are understanding the reality. So the market is going for equilibrium.

That's one part but I still think it was very much being overvalued ...

Good time to buy I'd say.

Personally, I've been waiting for it to come lower. It's elevated price from the mobile announcement was way too high. In this kind of market, most of the investors have no clue about gaming. They only buy and sell based on the trends and buzzwords. I think Nintendo stock is worth those mobile announcement levels, but it'll take a bit of time for people to realize that.

Now is perfect time to buy Nintendo stocks, after releasing first mobile game and announcement of NX stocks will go up.

When did you exit? I'm holding, mostly because I simply don't own a high enough volume of shares to buy and sell often, and I feel pretty confident about SNE with a 3 year perspective. I also bought MSFT after they dropped at the end of last Jan, holding that one too. It should perform alright no matter what, and the dividend is good regardless.

My biggest problem is the currency though (NOK). It's gone from 6 NOK = 1 USD to 9 NOK = 1 USD in 18 months @_@ Because of that, I've gotten a lot more timid about investing in the US market, so I'm eyeing some potential Norwegian stocks atm.

EDIT: Christ, why did SNE drop 8% today?

People saw Amiibo Festival sales and sold it.

How much of it is affected by the recent days eastern market flop ? I heard that stocks in china/japan dropped 6/7% in the last few days

I can't for the life of me figure out why? Oculus price reveal? That they'll "focus on the products that matter"? Damn. I'd buy more at these prices if it hadn't been for my currency issue.

Interest hike?