The Magnum Ice Cream Company, a spinoff from Unilever, began trading on exchanges in Amsterdam, London, and New York on Dec. 8. TMICC closed its first day of trading at €12.97, aligning with the €12.8 technical reference price set by Euronext. The ice cream business is the world’s largest pure play, boasting leading global brands.

TMICC shares are under pressure due to UK index-tracking funds selling off shares received in the spinoff. The company’s Dutch domicile may be a contributing factor. Despite this, the new management team and focused strategy are expected to drive growth. Morningstar awards TMICC a wide moat rating and estimates a fair value of €17/GBX 1,480/ USD 19.80.

Magnum is the global leader in ice cream, dominating the premium segment, especially in developed markets. The company owns four of the six most recognized ice cream brands globally and three million freezers, providing essential distribution capacity. Forecasts predict 4% organic sales growth and annual EBITDA margin accretion through 2029.

The new management team is executing a €500 million productivity program to address inefficiencies. Marketing investment and innovation are expected to drive sales growth above the market average. TMICC also plans to expand into underpenetrated markets in Latin America and Asia. Unilever benefits from the separation, simplifying its portfolio by removing a business with limited synergies.

Read more at Morningstar: Launching Coverage of The Magnum Ice Cream Company: Shares Undervalued