TPG's (TPG) top priority is growth through private equity, tech investments, and strategic acquisitions, but the current stock price doesn't reflect this potential, RBC said in a Monday note.

About half of the company's assets under management are in private equity, which is now entering a period where it can generate more revenue, the analysts said, adding that the recent drop in the stock price seems "overdone."

The company also has a long-term opportunity to increase its fee-related earnings, or FRE, margins, the firm said. After acquiring Angelo Gordon and finishing 2025 with mid-40% FRE margins, TPG still has higher expenses than its peers. This leaves room for about 3 percentage points of margin improvement in the near term as the company continues to grow, the analysts said.

The analysts added that the company's recent drop due to artificial intelligence and software concerns offers a good entry point into a business expected to grow its direct equity faster than peers over the next two years.

RBC initiated TPG at outperform with a $59 price target.

Price: 42.81, Change: +0.46, Percent Change: +1.10