Raising Estimates on Marvel Due to Optimism on Hulk; Reiterate Outperform

6/11 - "Despite the massive success of ’Iron Man’, concerns about ’The Incredible Hulk’ have remained a negative for Marvel shares. However, buzz for the movie has improved markedly over the past few weeks, and we now believe that concerns about the box office prospects for ’The Incredible Hulk’ are largely unwarranted. We are raising our domestic box office estimate for the film from $125MM to $150MM, as well as our EPS estimates for FY08E and FY09E. We believe MVL shares can outperform the market by at least 10% over the next 12 months and we rate the shares Outperform."

"One of the factors which impressed us the most about the film at our screening was the degree to which the film ties in to other Marvel properties, such as Iron Man and Captain America. Marvel is clearly building towards its planned ’Avengers’ film in 2011. Additionally, we think the ability to cross-promote characters across films will give Marvel an added edge when introducing new film franchises."

"We are increasing our ’Iron Man’ domestic estimate from $275MM to $300MM based on its performance to-date. The combined effect of the increased box office estimates for the two films is to raise our EPS estimate for FY08E from $1.88 to $1.97 and for FY09E from $2.02 to $2.23."