Magnum Ice Cream Company: what happens now?
With the world’s largest ice cream company listing separately on the stock market, Graeme Evans looks at share price forecasts and the influence of institutional investors.
9th December 2025 15:47
by Graeme Evans from interactive investor
Magnum chocolate-coated ice cream. Credit: The Magnum Ice Cream Company.
Unilever shareholders pondering the future of Wall’s and Cornetto in their portfolios have received a positive assessment on the newly listed The Magnum Ice Cream Co NV (LSE:MICC).
In two of the first City recommendations since Monday’s demerger from Unilever (LSE:ULVR), UBS initiated coverage with a Buy stance and JP Morgan started with a Neutral position.
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Amsterdam-listed Magnum, which has secondary listings in London and New York, is valued at 14.3 euros a share by UBS and 14 euros at JP Morgan. Shares opened at 12.2 euros and closed last night at 12.9 euros a share, giving a market capitalisation of 7.9 billion euros (£6.9 billion).
UBS said its target implied a price of 14.2 times 2026 forecast earnings, a discount of 31% to the European food sector that leaves room for a re-rating should Magnum create a good track record.
It said Magnum had levers at its disposal to support its continued outperformance within a subdued category that also faced mounting structural headwinds.
The bank also highlighted a “back-end loaded” margin expansion plan and the prospect of meaningful free cash flow generation from 2028-29, assuming separation and restructuring costs decline in line with hopes.
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It said: “Overall, we expect market expectations for organic sales growth and free cash flow to be rather subdued, opening the door to a share price re-rating should TMICC deliver on its ambitions.”
On Monday, Unilever shareholders received one share in Magnum for every five held in the consumer goods giant. The Unilever share price declined yesterday by 80.1% of Magnum's equity value, reflecting the fact Unilever still retains a 19.9% stake.
This was followed by today’s consolidation involving eight new Unilever shares for every nine held, meaning that the FTSE 100–listed company’s share price, earnings and dividends per share are comparable before and after the demerger.
Unilever’s net income will contract by about 10% because of the Magnum demerger, ignoring any 2026 separation costs and synergy benefits.
The demerger has left Unilever with the divisions of Beauty & Wellbeing, Personal Care, Home Care and Nutrition. These business groups have complementary routes to market, unlike ice cream whose characteristics include a frozen goods supply chain and heightened seasonality.
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Magnum is the world’s largest ice cream company, with a fleet of nearly three million freezers and products available in 80 countries. It generated 7.9 billion euros in revenue in 2024.
As an independent listed company, Magnum chief executive Peter ter Kulve has said that his company will “be more agile, more focused, and more ambitious than ever”.
He highlighted a clear strategy to deliver growth, improve productivity and reinvest in Magnum.
In the near term, the Magnum valuation is likely to be skewed by technical factors as some Unilever institutional investors become forced sellers due to factors ranging from the company’s income profile to its lack of presence in the FTSE 100.
UBS said today that it expects about $580 million (£436 million) of Magnum outflows on Wednesday because, unlike Unilever, the company will not be part of the FTSE index series. Dividend payments are set to begin in 2027, according to the note.
In response to Magnum’s capital markets day in September, Deutsche Bank said that it expected an enterprise valuation of between seven and nine times forecast 2027 earnings compared to Unilever on 11 times.
It added: “We would be surprised if investors wanted to pay more than this at this point for a company with seasonality and with a high depreciation figure (39% of adjusted earnings) which leads to volatility.”
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