TPG stock rating upgraded by BNP Paribas Exane to Outperform

Investing.com - BNP Paribas (OTC:BNPQY) Exane upgraded TPG Inc . (NASDAQ:TPG) from Neutral to Outperform and raised its price target to $69.00 from $56.00 ahead of the company’s August 6 earnings report. According to InvestingPro data, TPG, currently valued at $21.71 billion, appears undervalued based on its Fair Value analysis.

The upgrade reflects TPG’s strong track record and upcoming fundraising cycle, which BNP Paribas Exane projects will support $81 billion in fundraising from 2025 to 2027.

The investment bank noted that TPG’s Angelo Gordon unit has seen a 24% increase in assets under management over 2023-2024, positioning the company for future deployment opportunities.

BNP Paribas Exane expects TPG’s fee-related earnings margin to expand from 42% to 50% between 2024 and 2028, supporting fee-related earnings growth that could outpace larger U.S. peers. InvestingPro data reveals 5 analysts have revised their earnings upward for the upcoming period, with additional insights available in the comprehensive Pro Research Report.

The firm’s estimates exceed Bloomberg consensus by 1%, 9%, and 11% for distributable earnings after tax for 2025-2027, with potential upside from TPG’s developing insurance and wealth management businesses. The company maintains a steady 2.81% dividend yield, demonstrating its commitment to shareholder returns.

In other recent news, TPG Inc. has completed its acquisition of the remaining 70% stake in DIRECTV from AT&T, making DIRECTV a wholly owned portfolio company of TPG Capital. This acquisition builds on TPG’s existing 30% ownership in DIRECTV and is expected to accelerate investments in streaming services. Additionally, TPG Inc. filed a prospectus for the resale of up to 2.9 million shares by a stockholder, stating that it will not receive any proceeds from this sale. In another development, China’s sovereign wealth fund has canceled its planned sale of $1 billion in U.S. fund stakes, which included positions with TPG Inc., according to Bloomberg.

Meanwhile, Wolfe Research has initiated coverage on TPG Inc. with an outperform rating, citing the potential for TPG to double its assets under management from $250 billion to $500 billion in the medium term. This optimistic outlook is supported by TPG’s strong track record of returns, which Wolfe Research believes will enable the firm to expand its flagship funds despite challenging macroeconomic conditions. Furthermore, TPG Rise Climate, a division of TPG Inc., is set to acquire a majority stake in Aurora Energy Research, a global energy intelligence platform. This acquisition aligns with TPG’s focus on climate investing and its commitment to expanding its reach in the energy sector.

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