Altus Group upgraded at National Bank

National Bank Financial Markets analyst Richard Tse said Aug. 12 that reports of Altus Group (Altus Group Stock Quote, Chart, News, Analysts, Financials TSX:AIF) exploring a potential sale follow inbound acquisition interest, with investment bankers soliciting buyer interest, including from private equity.

He said sources noted no deal is guaranteed and the company may continue as a public entity. Altus shares closed up 9.5% on the day.

Tse upgraded the stock to “Outperform” from “Sector Perform” and raised his target to C$74 from C$60.

“In our opinion, an acquisition of Altus would not be unreasonable,” he said. “From a product perspective, the company’s ARGUS Enterprise product (now ARGUS Intelligence) is widely considered the standard cash flow/valuation modelling software in the market. In our opinion, that asset would strategically fit well with any number of property technology companies.

“Separately, the recent sale of its property tax business for $700 mln to Ryan, LLC has made for a stronger balance sheet ($338 mln in cash and $158 mln in debt for a funded-debt-to-EBITDA ratio of 1.3x), potentially appetizing to a financial buyer. Finally, we’re also of the view that given the background of CEO Jim Hannon in private equity, a sale would be consistent with that operating background.”

Tse said the reported sale interest comes shortly after Altus delayed its investor day from Sept. 9, 2025, to Nov. 20, 2025, following last week’s FQ2 release.

“While there are only reports at this time – we think they are reasonable, particularly in light of the abrupt investor day date change. As such, we’re opting to value this name on a potential takeout scenario.”

Tse said this approach uses the average of strategic and private equity takeout valuation ranges, producing the updated C$74 target, which implies 28.1x EV/EBITDA on FY25 estimates and an ~28% potential total return.

He said a “very reasonable” acquirer would be CoStar Group, with ARGUS Intelligence complementing CoStar’s global CRE analytics business.

Other possible strategic buyers include MSCI, Moody’s, CoreLogic, Colliers International, and CBRE Group.

“From a strategic standpoint, given the complementary value offered by ARGUS Intelligence, we think a valuation range of 25 – 30x EV/EBITDA would be reasonable as a relative premium to close comps and precedent private transactions in the market. That would put the stock price between ~$67 – $79.”

Tse forecasts Altus will post $107.7-million in Adjusted EBITDA on $535.2-million in revenue for 2025, rising to $135.7-million on $574.1-million in 2026.

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