Barclays Upgrades StepStone Group (STEP) to Overweight with $55 Price Target
On March 2, 2026, Barclays analyst Benjamin Budish upgraded StepStone Group (NASDAQ: STEP) from Equal-Weight to Overweight, while simultaneously lowering the price target from $67 to $55. The move comes as part of a broader reassessment of the alternative asset management space, with Barclays shifting its preference toward StepStone and away from peer Blue Owl Capital (NYSE: OWL).
Why the Rating Changed
The upgrade of StepStone was directly tied to Barclays’ revised outlook on the private credit and business development company (BDC) landscape. Several specific factors drove the decision:
- Relative insulation from BDC outflow risks: Barclays now assumes that net flows for non-traded BDCs will turn negative in 2026 and remain under pressure for several quarters. The firm specifically noted that StepStone has less exposure to these headwinds compared to Blue Owl Capital, which was simultaneously downgraded to Equal-Weight.
- Private credit and AI-related concerns: Barclays flagged broader risks around private credit and BDC flows, as well as fears related to artificial intelligence disruption. StepStone’s business mix was viewed as better positioned relative to these pressures.
- Paired trade dynamic: The upgrade was part of a clear relative value call. Barclays cut Blue Owl’s price target to $11, citing lower earnings expectations and a more conservative view on fee growth, while simultaneously moving StepStone to its preferred pick in the space. This suggests that while the broader alternative asset management sector faces challenges, Barclays sees StepStone as the stronger relative performer.
It is worth noting that while the rating was upgraded, the price target was actually reduced from $67 to $55. This reflects a more cautious macro and sector outlook overall, even as Barclays views StepStone as better positioned than its peers to weather the current environment.
StepStone’s Dividend Profile
For income-focused investors, StepStone Group currently pays an annual dividend of $1.48 per share, which translates to a dividend yield of approximately 3.43% at recent prices. The most recent ex-dividend date was February 26, 2026.
A yield above 3% is notable for an alternative asset manager, a sector where dividend payouts can vary significantly depending on fund performance and management fee structures. Investors considering STEP for its income component should monitor whether the company’s fee-related earnings remain stable in light of the broader pressures Barclays identified across the private credit space.
What This Means for Investors
Barclays’ call is fundamentally a relative positioning decision within the alternative asset management sector. The firm sees mounting risks in non-traded BDCs and private credit flows, and believes StepStone is better insulated from those headwinds than competitors like Blue Owl Capital. The lowered price target of $55 signals that even the preferred name in the space is not immune to the challenging environment, but Barclays believes StepStone offers a more favorable risk-reward balance at current levels.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.