TPG Has A High Growth Trajectory, BofA Says With Buy Rating: What Else Impressed The Analyst?

TPG Inc TPG has a robust business model, which is high growth, capital light and drives fee-related earnings, according to BofA Securities.

The TPG Analyst: Craig Siegenthaler initiated coverage of TPG with a Buy rating and a price target of $47.

The TPG Thesis: There is visibility into strong earnings growth in 2022 to 2024, given the company’s “fundraising super-cycle” and the opportunity to expand the model “horizontally into new white spaces (credit, life sciences, infrastructure, retail vehicles),” Siegenthaler said in the initiation note.

“Two-thirds of TPG’s AuM (assets under management) is contributed from businesses that we view as having among the most attractive secular growth prospects in private markets (growth capital, impact, healthcare, technology, Asia and real estate),” the analyst wrote.

He added that TPG is the industry leader or an early mover in many of these segments.

“We estimate there are 1,000 unicorns or large privates that are looking to IPO over the next few years and their market value equates to an addressable market of $5Tn,” Siegenthaler mentioned.

TPG Price Action: Shares of TPG are down 1.72% to $32.51 at the time of publication Monday morning.

Photo by Towfiqu Barbhuiya on Unsplash