Wedbush Morgan's Michael Pachter believes that Nintendo's share price will see new gains over time, and that the Wii manufacturer won't be affected by the global downturn in the way that some investors seem to believe.
The company's share price has lost around half its value since this time last year, with investors concerned over the strong yen hitting export revenues and a belief that consumers may stop spending on videogames.
However, Pachter has dismissed that notion as "highly unlikely" and believes that Nintendo's earnings per share should increase significantly over time.
"Nintendo stock has traded off significantly from highs earlier this year, as investors appear concerned that the company's earnings are peaking in FY09, with US and European consumers likely to tighten spending and abandon video games," he said in a note to investors.
"In our view, this is highly unlikely. Even after considering translation effects, we believe that the company has the potential to deliver EPS above the JPY 2700 mark this year and above the JPY 3500 mark next year.
"We believe that as we gain more visibility into the holidays, investors will see that demand for Nintendo products remains quite strong, and we expect its shares to again appreciate."
Nintendo announced its financial results earlier this week with a headline net income rise of 9.4 per cent for the six months to September 30. The company's current share price is JPY 31,300 (USD 323).