Square Enix Gains After JPMorgan Lifts Rating to ‘Overweight’

Square Enix Holdings Co., a computer-game software developer, is set for its biggest advance in more than three month after JPMorgan Chase & Co. raised the investment rating on the shares to “overweight,” citing an improved earnings outlook on upcoming title releases.

Tokyo-based Square Enix gained 3.9 percent to 1,397 yen at the 11 a.m. trading break on the Tokyo Stock Exchange, set for the biggest gain since March 22. JPMorgan increased its rating on Square Enix to “overweight” from “neutral” and raised the share-price estimate for May 2012 to 1,750 yen from 1,230 yen.

“We believe the intrinsic value of the company is higher than denoted by the current share price, given the depth of intellectual property available,” analysts Hiroshi Kamide and Yusuke Maeda wrote in a report dated June 27. “We expect the outlook for earnings to improve into fiscal 2012, with a solid title release schedule overseas.”

To contact the reporter on this story: Norie Kuboyama in Tokyo at nkuboyama@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net.

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