Is Wall Street wrong about odds of AT&T, Time Warner regulatory approval?

Wall Street should have more faith in the capacity of AT&T Inc.’s $85.4 billion deal for Time Warner Inc. to receive regulatory approval.

That’s according to Wedbush analyst James Dix, who upgraded Time Warner TWX, -3.06% to outperform from neutral on Tuesday, while maintaining a 12-month price target on the stock of $105.

Time Warner shares on Monday closed down more than 19% from AT&T’s T, -1.68% $107.50-per- share offer in cash and stock. That implies investors — who’ve gotten the short end of the stick in recent busted deals — believe the deal’s chances of getting approved are about 50%, according to Dix.

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