Nintendo has big games in the works that could provide a boost to Switch sales

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Nintendo is about to splash the video game market with some major new games – and that could mean an increase in sales of its Switch gaming console.

Jefferies badyst Atul Goyal found that every time Nintendo PlayStation competes for major new games, its peak in console sales. If Goyal's hypothesis that PS4's sales trends are somewhat predictive of Nintendo is correct, its Nintendo shareholders are ready to reap the rewards.

"We are seeing PS4 sales trends after the first year, and we find that PS4 sales have shown weak trends in the first two years, as they have not seen a major launch during these months. "Goyal wrote in a note to customers. "Major game launches are what attracts users to buy consoles."

Jefferies

These results are becoming a boon for Nintendo shareholders, as the video game maker has some major launches in the coming months:

• Mega Man 11: (2 October 2018)
• Super Mario Party (5 October 2018)
• Pokémon: Let's go, Pikachu! (November 16, 2018)
• Super Smash Bros. Ultimate (December 7, 2018)

Goyal also believes that a wind after the digital adoption is also on the horizon for Nintendo. "The increasing adoption of digital technology remains the main driver of the margin after the first three or four years of software sales growth," he said. "This will come (1) from a higher percentage of digital downloads (2) of increasing online game sales (3) of online subscription sales (as of September)."

And while it's something for shareholders, it's worth noting that Goyal is the biggest bull on Wall Street. Although he was right in predicting a sharp rise in equities over the past year, he also remained bullish, although they have plummeted from their recent highs.

At the beginning of June, when equities had only fallen 10% since their peaks, Goyal suggested that the weakness was due to technical and only temporary factors.

At the time, Goyal reiterated his purchase recommendation. "As fundamental badysts, we look at the business, the competition, the supply chain, the profits, the cash flows, the dividends, the valuations – which reinforce, and we would say BUY", he wrote. "And we repeat BUY."

Then, in mid-June, Goyal doubled his call "buy" after stocks tumbled 20% in a month, highlighting the very popular success of Nintendo Switch, and prospects for its mobile business.

Goyal has a price target of $ 87.21, more than double the $ 40.49 where stocks are currently traded.

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