By Jack Denton

There are few things more festive than a sweet treat, and investors looking to rebalance their portfolios in the holiday season may want to look at a certain ice cream stock.

Consumer goods giant Unilever spun off The Magnum Ice Cream Company earlier this month, with a debut valuation north of $9 billion.

While the listing in Amsterdam fell short of expectations, and there could be concerns about the popularity of sugary treats as health consciousness grows, the team at Deutsche Bank think the stock may still be worth a taste.

"The Magnum Ice Cream Company is the global market leader in the Ice Cream category, which management estimates could plausibly grow at a 3-4% compound annual growth rate into the medium term," analysts led by Tom Sykes wrote in a note this month.

Deutsche Bank initiated coverage of Magnum with a rating of Hold and a target price of 14.50 euros ($17.09). The stock was trading around EUR13.30 in Amsterdam on Wednesday, implying a potential gain of more than 9% based on the Deutsche target.

Sykes and his team expect the stock to trade at an enterprise value of up to nine times Ebitda, or earnings before interest, taxes, depreciation, and amortization, which could imply a share price of up to EUR15.

With its listing, Magnum became the world's largest stand-alone ice cream company. It "has the opportunity to take market share," wrote the analysts, who also noted they "suspect digital commerce growth will see more competition from improved distribution among smaller players."

Magnum should also benefit from projected declines in raw materials costs over the next two years, however, according to Deutsche Bank, which would boost gross margins and investment.

Emerging markets are also a key driver of growth, though analysts say that raises concerns around exposure to Turkey -- around 8% of sales -- in particular. The volatility of the lira creates foreign-exchange risk.

Another factor for investors to be aware of is seasonality. "We expect Ice Cream to be benchmarked against other seasonal Staples companies in Europe, such as brewing companies," wrote the team at Deutsche, pointing to names like AB InBev, Heineken, and Carlsberg.

But seasonality isn't necessarily a bad thing. In fact, 'tis the season that makes Magnum worth a look right now.

Write to Jack Denton at jack.denton@barrons.com

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December 24, 2025 08:50 ET (13:50 GMT)

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