Shares in consumer goods giant Unilever (UL) melted today despite forecasting strong sales growth for its soon-to-be spun-off Magnum-led ice cream business.
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Unilever said it expects the unit, to be called the Magnum Ice Cream Company, will see average organic sales growth of between 3% and 5% in the medium term from 2026.
Global Share
Indeed, Unilever expects the ice cream unit, which includes brands such as Magnum, Ben & Jerry’s and Wall’s, to command just over a fifth of the around $88 billion global ice cream market and compete with rivals such as Nestle (NSRGY)-backed Froneri.
The spin-off is expected to take place in mid-November and will see Unilever retain a 20% stake. The Magnum Ice Cream Company will float with a primary listing in Amsterdam.
The ice cream business, which includes four of the world’s top five brands, generated 7.9 billion euros ($9.3 billion) in revenue in 2024 and 1.2 billion euros of adjusted EBITDA.
Recently Unilever reported that its ice cream arm saw sales rise by 7.1% in Q2 and by 5.9% in the first six months of 2025. It said new innovative products had helped drive demand such as the Magnum ‘multisensory’ Utopia range and Cornetto disc cones as well as hotter weather. See above chart.
Peer Pressure
Those sales are impressive but the division has typically delivered lower margins than the company’s other sectors such as personal care and beauty and well-being.
The split is part of Unilever’s efforts to streamline its product offering to help it boost productivity and growth.
It also wants to move further toward beauty and personal care, with less of a focus on food. It also sold its Vegetarian Butcher plant-based brand earlier this year and confirmed recently that it was exploring the potential sale of its Graze snacking line.
It’s a strategy also being carried out by its rivals such as Keurig Dr Pepper (KDP), which last month announced plans to combine with JDE Peet’s and then separate its cold beverage and coffee divisions. Nestle is also reported to be considering selling underperforming brands in its vitamins division.
Is UL a Good Stock to Buy Now?
On TipRanks, UL has a Moderate Buy consensus based on 1 Buy rating. Its highest price target is $67. UL stock’s consensus price target is $67, implying a 4.69% upside.
