Private-Equity Stocks Have Gotten Crushed. J.P. Morgan Says This One Is a Buy.

J.P. Morgan sees a “goldilocks scenario” for TPG over the long term. (Dreamstime)

Key Points

• J.P. Morgan upgraded TPG stock to Overweight from Neutral, setting a $78 price target, representing over 30% upside.
• TPG aims to double its assets under management to more than $500 billion.
• Despite a 9% decline in 2025, TPG’s earnings are projected to grow 17% in 2025 and 27% in 2026.

Investors have grown skeptical when it comes to the stock of private asset managers. That may provide a buying opportunity for TPG , a midtier player that still has plenty of room to grow.

It has been a rough year for shares of private asset firms and other alternative money managers. The private-equity business, once the industry’s bread-and-butter, has slowed as firms have struggled to cash out of companies they have bought and distribute money to investors. Meanwhile, private credit, which had been picking up the slack, has its own problems, with a spate of high-profile bankruptcies giving investor jitters.

Shares of top players like Blackstone, KKR , and Apollo Global Management are all underwater year to date.

Shares of TPG have suffered too, declining 9% in 2025. All the same, the firm just got a big vote of confidence from J.P. Morgan, which upgraded the stock to Overweight from Neutral on Monday. J.P. Morgan’s $78 price target represents upside of more than 30%, based on the shares’ current price of $58.

TPG’s $260 billion in assets under management puts it just below the top rank of alternative managers. Blackstone oversees more than $1 trillion, while other major players like Carlyle Group and Ares weigh in at around $500 billion.

Still, TPG management has outlined a plan to double assets to more than $500 billion over the next few years. Given its successful record of acquisitions and room to collect more investment dollars from wealthy individuals and insurance companies, that goal is within reach, according to J.P. Morgan analyst Kenneth B. Worthington.

TPG took a major step forward when it acquired credit and real estate manager Angelo Gordon for $2.7 billion in November 2023 in a deal that added more than $70 billion to its asset base. The company followed up with digital infrastructure firm Peppertree Capital Management in July.

Those deals not only boosted revenue, they have diversified TPG. Currently, the Angelo Gordon credit operations are TPG’s largest business by assets, with around $80 billion. But TPG’s traditional private-equity arm isn’t far behind with $76 billion.

Still other units include Growth, which targets early-stage companies, and Impact, which focuses investments with positive and social and environmental characteristics. Both those units oversee around $30 billion.

J.P. Morgan thinks TPG is in a sweet spot, where it is big enough to be diversified, with a host of different business lines, but not so big that it will run out of room to grow. “We see a ‘goldilocks scenario’ in the long run,” wrote Worthington.

There are risks. Despite this year’s selloff, shares still trade at around 20 times forward earnings. That is higher than the average of around 19 for alternative asset managers, according to FactSet. And, of course, a market downturn could hit the sector hard, throwing a wrench in TPG’s ambitious plans.

Still, J.P. Morgan is hardly alone in seeing TPG as a big growth story. Wall Street forecasts call for TPG’s earnings to grow 17% for 2025, and 27% next year. The average price target is $66, suggesting a gain of about 15% from today’s prices.

Write to Ian Salisbury at ian.salisbury@barrons.com