After The Magnum Ice Cream Company (EURONEXT:MICC, LSE:MICC, NYSE:MICC) began its first session as a listed standalone business, finishing at 1,122.4p or €13 per share for a market capitalisation of €7.9 billion, investment banks gave differing views on its prospects.
UBS initiated coverage with a 'buy' rating and a €14.3 price target, citing outperformance in a "subdued" category boosted by and "mounting structural headwinds", a margin expansion plan and "meaningful" free cash flow (FCF) expected from 2028.
UBS forecasts medium-term organic sales growth of 3.2% at the low end of TMICC’s stated 3-5% range, reflecting slower consumption in developed markets.
Analyst Guillaume Delmas sees growth facing risks from healthier eating trends, weight-loss drugs and regulation.
But he expects margin gains to accelerate from 2027 as cost savings take effect and TMICC exits transitional service agreements, while adding that falling cocoa prices could provide a gross margin tailwind in late 2026.
"Overall, we expect market expectations for organic sales growth and FCF to be rather subdued, opening the door to a share price re-rating should TMICC deliver on its ambitions."
JPMorgan initiated with a 'neutral' rating and a €14 price target, predicting earnings growth to be supported by supply-chain efficiencies but fearing that early-stage costs will weigh on delivery.
Analyst Celine Pannuti wrote: “We expect the ramp up in costs will lead to a delivery that is back end loaded", with 2025/26 margin expected to be weighed down by India consolidation, the impact of transition services agreements with former parent Unilever PLC (LSE:ULVR)) and weaker cash flow.
She expects like-for-like sales growth of 2.9% in FY26, citing pricing easing, a weak consumer environment and tougher comparatives.
While medium-term EPS growth and FCF prospects look "compelling", the JPMorgan analyst forecasts 2026 results will be at the bottom of the medium-term financial targets, which leads to the neutral rating.
Both analysts said TMICC trades at valuation levels broadly in line with European food and beverage peers.
UBS said its €14.3 target implies a 2026 EV/EBITDA of 9.3 times, while JPMorgan forecasts 2027 multiples of 11.3 times earnings and 7.4 times EV/EBITDA.
MICC shares were down 2% on Tuesday at 1,100.4p.