Goldman Sachs recommends buying Nintendo stocks as the launch of the Switch 2 draws closer, foreseeing a potential increase in profit and sales for the company. They are optimistic about the upcoming release of the Switch 2 and emphasize investors should keep an eye on Nintendo's upcoming handheld console launch.

With a target price of ¥13,600 for Japanese-listed shares, showing a possible 20% increase in value, Goldman Sachs has reinstated coverage of Nintendo stock with a "Buy" rating. The American Depositary Receipt (ADR)-listed shares of Nintendo, trading as "NTDOY," experienced a 4% rise in trading to $18.78.

Goldman Sachs is positive about the Switch 2 launch, expecting it to propel hardware and software sales, potentially setting new profit records for the company. Nintendo is anticipated to unveil details of the Switch 2, such as features, release date, pricing, and launch games during a Nintendo Direct broadcast on April 2.

Moreover, Goldman Sachs views Nintendo's entry into the movie industry as promising, leveraging its rich catalog of intellectual properties. Notably, the success of the Super Mario Bros. Movie in 2023, which earned $1.3 billion globally, has encouraged Nintendo to develop a movie based on the Legend of Zelda video game.

Additionally, Goldman Sachs notes Nintendo's strong financial position, highlighted by its debt-free balance sheet and an appealing equity ratio of 83%. The ADR-listed Nintendo shares have surged 28% year-to-date and 37% in the past year, trading close to record levels.