Unilever Share Price Target Trimmed Following Magnum Ice Cream Spinoff

Unilever shares (LON: ULVR) are under scrutiny following the completion of the Magnum Ice Cream Company (MICC) demerger, leading to a shifting outlook by analysts. Bank of America (BofA) has adjusted its price target for Unilever, reflecting the anticipated impacts of this strategic move.

BofA lowered its price target for Unilever (LON: ULVR) to 5,700 GBp from 6,075 GBp, while maintaining a ‘Buy' rating on the shares. The adjustment follows the successful listing of MICC and the completion of Unilever's share consolidation. The firm anticipates that investors will now focus on a more streamlined Unilever, whose fundamentals are expected to perform well into the fiscal year 2026.

Unilever executed an 8-for-9 share consolidation on December 8, 2025, following the MICC demerger. This action adjusted the share count to reflect the company's new structure post-demerger, with the post-consolidation shares commencing trading on the London Stock Exchange the following day.

MICC's debut on the Amsterdam stock exchange saw a valuation of €7.8 billion ($9.1 billion). The initial share price was set at €12.80, lower than earlier estimates by Barclays, which had projected a price exceeding €20. The subdued investor response was attributed to concerns over the brand's focus on sugary products, the absence of dividends in 2026, and costs associated with the spin-off.

Analyst perspectives on Unilever post-demerger vary. RBC Capital Markets maintains an ‘Underperform' rating with a price target of 4,000 GBp, expressing concerns that the demerger may dilute Unilever's earnings base. They also question the company's ability to achieve its midterm goal of 4-6% organic sales growth. UBS has a ‘Sell' rating with a 12-month price target of 4,120 GBp, cautioning that the ice cream sector faces challenges such as declining consumption in developed markets and the impact of weight-loss drugs.

Following the demerger, Unilever is allocating approximately €1.5 billion ($1.74 billion) annually for mergers and acquisitions, with a strong focus on opportunities in the United States. This strategy aims to strengthen its position in core categories and markets.