Nintendo’s record gain tested in wait for ‘Switch 2’

Nintendo’s recent climb to a record high is looking increasingly stretched as investors wait for news on the successor to its aging Switch game console.

Shares of the Mario and Zelda creator have soared 47% in the past year, compared with a 28% gain in Topix. Expectations for a new machine that some have already dubbed the “Switch 2” have fueled gains, although there has been no official word yet from the company. Hope for more popular films featuring Nintendo characters and the ongoing boom in Japan’s stock market have also contributed.

The stock has outpaced gains in console rivals Microsoft and Sony Group over the past couple of months. It’s trading at a more expensive earnings multiple than an index of game peers for the first time ever and at the largest premium to analyst targets in at least two decades.