Warner Bros. Discovery's (WBD) potential split into two operating divisions would "more appropriately" value the organization and be "arguably positive" for shareholders, Deutsche Bank said Friday.
The upside would be realized if the two businesses, Streaming+Studio and Linear Networks, were valued independently, analyst Bryan Kraft wrote.
Kraft also said that a potential spinoff of the Linear Networks division would be "unquestionably negative" for creditors as it would diminish credit quality and raise financial risk.
CNBC's David Faber reported Thursday that the entertainment giant was moving toward a company split, and an announcement may come soon.
Deutsche Bank raised Warner Bros. price target to $20 from $14 and maintained its buy rating on the stock.
Shares of the company were up 1.4% in recent trading.
Price: 9.14, Change: +0.13, Percent Change: +1.42