Jefferies maintains its buy recommendation on the stock, raising its target price from 15,580 yen to 20,220 yen, following the announcement of Switch 2's release.

Jefferies says that this new console marks the beginning of a particularly promising earnings growth cycle, which is likely to lead to a sharp rise in the share price.

The broker points out that Nintendo currently ranks sixth in terms of market capitalization in Japan, with a valuation of between $95bn and $100bn.

Jefferies believes that the company could become the country's largest market cap within the next two to three years. It is raising its sales forecasts for the Switch due to stronger-than-expected launch momentum and better long-term visibility.

With improved short-term visibility and taking into account significant long-term changes in the industry, we estimate substantial earnings growth (over fourfold in three years and more thereafter), Jefferies concludes.


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