Marvel Entertainment’s surge: ‘I am Iron Man!’
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From Times staff writer Martin Zimmerman:
Never being much of a comic book guy, I always thought the best thing about Iron Man was that cool Black Sabbath song from back in the early ‘70s -- the one where Ozzy Osbourne proclaims the titular hero’s arrival with a cross between a shout and a gurgle.
Wall Street, it seems, begs to differ.
The cinematic version of the Marvel Comics superhero destroyed all comers over the weekend, amassing more than $200 million in worldwide ticket sales. It was second only to the original ‘Spider-Man’ in terms of opening weekend sales for a non-sequel.
That helped extend the recent rally in shares of Marvel Entertainment, which rose almost 8% today to $32.60 and are up more than 13% since last Wednesday’s close.
‘It just knocked our socks off,’ said Dave Miller, an analyst with SMH Capital in Los Angeles, who went to the ‘Iron Man’ premiere Wednesday night.
‘I could tell when the credits started to roll that this thing was going to be a hit,’ said Miller, who has had a ‘buy’ rating on Marvel (ticker: MVL) since January 2007 and today upped his 12-month price target for the stock to $40 a share from $34.
The initial success of ‘Iron Man’ is especially crucial to Marvel. Although about 15 Marvel-themed films have been made -- including ‘Spider-Man’ -- this is the company’s first venture into self-production.
The economics of Hollywood are notoriously murky, especially when they concern a movie that cost an estimated $150 million to make and an additional $120 million to market. But given the opening weekend grosses and the typical arc of a hit action movie, Miller is already projecting that ‘Iron Man’ will mean huge profit for Marvel, even after Viacom gets its cut for handling the movie’s marketing and distribution.
But it won’t be a slam dunk, for either Marvel or its metal-clad superhero. ‘Iron Man’ faces tough competition in the coming weeks from ‘Speed Racer,’ the next chapter of the ‘Chronicles of Narnia’ saga and the return of Indiana Jones to the big screen.
Marvel, meanwhile, is gearing up to release ‘The Incredible Hulk’ in six weeks. The film, a remake that comes five years after a previous version failed at the box office, has raised concerns among analysts who see ominous signs in the movie’s heretofore low visibility and troubled pedigree.
Although Miller notes that not every movie featuring a Marvel superhero has conquered the box office -- ‘Elektra,’ anyone? -- he believes that the worries about ‘Hulk’ are overblown. There was some negative buzz on ‘Iron Man’ too, he says.
Speaking of ‘too,’ Marvel, while releasing better-than-expected first-quarter earnings today, surprised absolutely no one by announcing plans for an ‘Iron Man’ sequel.
Somewhere, Ozzy must be smiling.
Money & Co. blogger Tom Petruno is on vacation this week. He returns May 12.