Nintendo (NTDOY) Surges 6.4%: Is This an Indication of Further Gains?

Nintendo Co. (NTDOY) shares soared 6.4% in the last trading session to close at $17.48. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 3.5% loss over the past four weeks.

Following President Trump's announcement to suspend U.S. tariffs across most countries for 90 days, the company’s shares soared, reflecting renewed investor optimism.

This company is expected to post quarterly earnings of $0.06 per share in its upcoming report, which represents a year-over-year change of -50%. Revenues are expected to be $1.51 billion, down 18.9% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Nintendo, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on NTDOY going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Nintendo is a member of the Zacks Gaming industry. One other stock in the same industry, MGM Resorts (MGM), finished the last trading session 16.1% higher at $29.93. MGM has returned -17.6% over the past month.

For MGM, the consensus EPS estimate for the upcoming report has changed -1.7% over the past month to $0.54. This represents a change of -27% from what the company reported a year ago. MGM currently has a Zacks Rank of #3 (Hold).

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."

Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Nintendo Co. (NTDOY) : Free Stock Analysis Report

MGM Resorts International (MGM) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research