TPG upgraded to Overweight at J.P. Morgan, as selloff presents opportunity

J.P. Morgan upgraded TPG (NASDAQ:TPG) to Overweight from Neutral on Monday, as the recent selloff of asset management sector stocks provides an attractive entry point for a stock poised to deliver outsized growth over the near term and a more extended period. Year-to-date, TPG stock dropped 6.1%, in contrast to the S&P 500's 15% rise during the same period.

TPG (NASDAQ:TPG) stock rose 0.8% in Monday afternoon trading.

"We believe that the recent sell-off in the alternative asset management segment - which we understand to be largely driven by concerns around private credit as punctuated by a number of high profile bankruptcies in recent weeks - appears to us to be more idiosyncratic," analyst Kenneth B. Worthington wrote in a note to clients. "Our due diligence suggests these defaults do not indicate ‘cracks’ are appearing in what has been a fast-growing business (private credit) for alternative asset managers, nor do we see the risk of contagion."

Furthermore, TPG (NASDAQ:TPG) has succeeded with recent acquisitions in terms of revenue and cost synergies, he said. "After completing more of a self-described 'building' year in 2024, TPG struck a constructive tone on the year-end call, outlining a number of building blocks to double AUM over the next handful of years (<5 years realistic per management on the call)," Worthington added.

J.P. Morgan increased its price target on the stock to $78 from $65.

The Overweight rating on TPG (TPG) aligns with the SA Quant rating and the average Wall Street rating, both at Buy;