The firm also raised its price target to $104 from $97 on shares of the New York City-based media company, according to the Wall Street Journal.
FBR analysts believe there's a "credible road" for Time Warner to avoid FCC review of its proposed $85.4 billion merger with AT&T (T), which "vastly improves" prospects for the deal's approval.
A DOJ merger will move more quickly and is based on antitrust law, meaning it will be less politicized, the firm said.
"We believe there is limited evidence of consumer harm in this deal, weak precedent to contest vertical mergers, and positive precedent for content/pipe consolidation," FBR said in an analyst note, according to Barron's. "Therefore, it is very possible there is no challenge; if there is a challenge, we believe AT&T/TWX would probably win."
Additionally, Netflix (NFLX) CEO Reed Hastings last week voiced approval of the deal, which helps it politically, the firm noted.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
The team rates Time Warner as a Buy with a ratings score of B+. The company's strengths can be seen in multiple areas, such as its solid stock price performance, notable return on equity, reasonable valuation levels, good cash flow from operations and growth in earnings per share. The team feels its strengths outweigh the fact that the company has had sub par growth in net income.
You can view the full analysis from the report here: TWX