Wedbush upgraded Time Warner (NYSE: TWX) from Neutral to Outperform with a price target of $105.00, saying while they don't love AT&T's (NYSE: T) strategy, they believe the deal will be approved.

Analyst James Dix commented, "TWX shares closed 19% below $107.50 deal on the table from T. This fat spread, from investors battered by recent busted deals, implies odds of deal approval well below 50%. While we share investor skepticism about T’s strategy, we focus here, rather, on the probability of regulatory approval. We see the probability in the 75% range, supporting our current PT, which offers 20%+ upside, an attractive reward/risk for shares with stand-alone value of ~$90 per share by the time of expected deal close (YE2017)."

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Shares of Time Warner closed at $86.74 yesterday.