This name is ’global leader’ while its stock trades at a 35-40% discount: analyst
Investing.com -- Earlier this month, Magnum Ice Cream (NYSE:MICC) (AS:MICCT) listed in Amsterdam with a market valuation of around €7.8 billion ($9.1 billion), coming in below what some analysts had expected.
The group, now the world’s largest standalone ice cream business, saw early trading pressured as index-linked investors exited following the long-awaited separation from Unilever.
Kepler Cheuvreux analyst Karel Zoete said Magnum is the "global leader" in the ice cream category, yet its shares are trading at a steep discount to peers. On Friday, Zoete initiated coverage on Magnum shares with a Buy rating and a target price (TP) of 16.30 euros, implying around 19% upside from current levels.
The analyst believes the company’s valuation fails to reflect its market position, margin recovery potential and improving operational performance.
He argues that at around 12x 2026E earnings and 11x EBIT, the stock is “too cheap to ignore, and that the period in which the shareholder base is being adjusted offers a good opportunity to build a position.”
“At our 12-month TP of EUR16.3, the shares would trade at a c. 25% discount to peers, versus 35-40% currently,” Zoete added.
Kepler sees Magnum as a turnaround story for the distant global market leader in a category growing at roughly 3–4% a year. Like-for-like sales growth is running at about 5% year to date, and the business has been regaining market share over the past year.
Zoete points to a long-term sales track record, noting that Unilever’s ice cream division delivered a 20-year sales CAGR of 3.8% in euros.
Margin recovery is a key factor behind the bullish call. The analyst highlights a 500 million euro productivity programme that is already underway and sees scope for meaningful EBITDA expansion over time, even though 2026 will still be affected by separation costs, elevated IT expenses and the dilutive impact of recent acquisitions.
“Much still needs to happen to elevate the company’s operating performance and achieve 20% EBITDA margins,” he wrote, adding that the business “was far from reaching its full potential when it was inside Unilever.”
“Although 2026 will still be a bit messy in terms of GAAP profits and free cash flow (FCF), we believe the company’s operating performance is already improving, while its ability to substantially grow margins offers a great deal of upside to the medium-term value of the business.”
