Time Warner shareholders will win even if the merger with AT&T doesn't happen, according to one Wall Street firm.
UBS raised its rating to buy from neutral for Time Warner shares, citing the importance of the company's quality assets such as HBO in a streaming world.
The Justice Department sued to block the $85 billion acquisition of Time Warner by AT&T in November, citing antitrust concerns.
"While we expect AT&T's acquisition of Time Warner to be approved, we believe this environment would make Time Warner's assets highly attractive to other media companies and internet-based competitors were the deal to be blocked," analyst John Hodulik wrote in a note to clients Monday. "Recent M&A multiples suggest little downside (and potential competitive bidding) for these assets were the deal to get rejected."
Hodulik reaffirmed his $108 price target for Time Warner shares, representing 13 percent upside to Friday's close.
The analyst noted that the Justice Department's brief said a merger between AT&T and Time Warner will lead to only a 45 cents per month increase in pay TV bills. Hodulik said the figure represents less than 1 percent of AT&T's average revenue per video subscriber.
"We also still find it difficult to understand why the DoJ believes pairing Time Warner assets with AT&T would give it any kind of scale advantage in content or distribution given the growth of digital," he wrote. "Claims in the DoJ brief that AT&T could work with Comcast to keep content off of vMVPDs [virtual multichannel video programming distributors] and use HBO against competitors do not reflect the realities of the OTT [over the top] world, in our view."
The analyst predicts the deal will close by mid-2018.
Time Warner shares are up 0.7 percent Monday.
Disclosure: Comcast is the owner of NBCUniversal, the parent company of CNBC and CNBC.com.
— CNBC's Michael Bloom contributed to this story.