Unilever set for growth breakthrough after ice cream scoop-out, says Barclays

Barclays and JPMorgan say Unilever is entering a game-changing phase after scooping out its ice-cream arm, with Barclays calling 2026 an inflection point as the group shifts from mass to premium and doubles down on the US and India; Barclays forecasts non-ice-cream EBIT margins approaching 20% and a 50% premium portfolio mix over time and keeps an ‘overweight’ rating. JPMorgan echoes the view that the separation positions Unilever to re-rate as a more beauty and personal-care-focused company, noting balance-sheet flexibility (about 2x EBITDA) to support bolt-on M&A and buybacks; the shares trade at 15.6x 2027 ex-ice-cream earnings, a valuation the banks deem compelling and a top pick for 2026.

Analysis

Barclays and JPMorgan characterise Unilever’s divestment of its ice-cream arm as a structural inflection, with Barclays explicitly calling 2026 the point when the group will "prove its volume muscle" after recent strong volume momentum. Barclays projects non-ice-cream EBIT margins reaching c.20% and a longer-term premium portfolio mix of 50%, while JPMorgan highlights a strategic shift toward beauty and personal care and accelerated growth in the US and India. Analysts note margin convergence with global peers and an AI-powered marketing engine as drivers of higher-margin growth, and both banks retain bullish ratings with Barclays 'overweight' and JPMorgan listing the stock as a top pick. JPMorgan flags balance-sheet flexibility at about 2x EBITDA that can fund bolt-on acquisitions and buybacks, and the shares trade at 15.6x 2027 ex-ice-cream earnings—a valuation both banks describe as compelling—but they also caution that the company is only "halfway through its transformation," leaving execution and leadership transition as primary risks to the thesis.

Key Decisions for Investors

• Consider accumulating or maintaining an overweight exposure to Unilever given broker conviction and a 15.6x 2027 ex-ice-cream earnings valuation that analysts call compelling
• Monitor 2026 volume trends and quarterly evidence of margin expansion toward the c.20% non-ice-cream EBIT target as the primary execution signal to add to positions
• Watch the pace of premium portfolio mix progress (target ~50%) and marketing/AI-driven share gains in the US and India as operational catalysts for re-rating
• Track leverage and capital allocation decisions around the cited ~2x EBITDA capacity—favor outcomes that prioritize value-accretive bolt-ons or buybacks over aggressive leverage increases
• Hedge or trim exposure if leadership disruption or indications that separation-related execution is stalling emerge, since analysts note the transformation is only halfway complete