J.P. Morgan Declares 'Overweight' on TPG: Is This the Private Equity Bargain You've Been Waiting For?
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- October 07, 2025
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In a significant vote of confidence for the private equity powerhouse TPG (NASDAQ:TPG), J.P. Morgan has upgraded its rating on the stock to 'Overweight' from 'Neutral'. This comes as a beacon of optimism for investors, with the banking giant raising its price target for TPG to a robust $42 from the previous $36, signaling substantial upside potential.
Analyst Kenneth Worthington, a key figure behind this optimistic outlook, views the recent slump in TPG's shares not as a red flag, but as an "attractive opportunity" for savvy investors.
Indeed, TPG's stock has faced headwinds, declining approximately 15% since early May. This downturn has seen it underperform its peer group, which includes industry heavyweights like Blackstone (BX), KKR (KKR), Apollo Global Management (APO), and others, by a notable 10 percentage points.
Worthington acknowledges the pervasive market anxieties surrounding private equity firms, particularly fears of a slowdown in fundraising activities and potential downward revisions in asset valuations.
These factors could undeniably exert pressure on incentive fees, a crucial revenue stream for firms like TPG. However, J.P. Morgan's analysis suggests that these concerns are already "more than discounted" into TPG's current stock price, implying that the market has overreacted to potential future challenges.
What underpins J.P.
Morgan's renewed bullish stance? A closer look reveals TPG's impressive fee-related earnings (FRE) growth. Worthington projects a healthy 20% FRE growth for TPG in 2024, followed by a solid 10% increase in 2025. This consistent growth trajectory, driven by stable and predictable fee income, positions TPG as a resilient player in a dynamic market.
Furthermore, TPG is championed as a "high quality growth private equity manager with an improving capital structure." This description highlights the firm's robust operational strength and sound financial management.
Its strategic holdings, including significant ownership stakes in publicly traded alternative asset managers, also add a layer of diversification and potential value.
For investors eyeing the private equity space, J.P. Morgan's upgrade offers compelling insights. It suggests that while market volatility may present short-term challenges, the underlying fundamentals of high-quality firms like TPG remain strong.
The recent selloff, rather than being a cause for alarm, could indeed be the opportune moment to consider an entry into a company poised for continued growth, as championed by one of Wall Street's leading financial institutions.
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