Time Warner CEO Jeff Bewkes arrives ahead of arguments in the trial to determine if AT&T's merger with Time Warner is legal under antitrust law at U.S. District Court in Washington, U.S., March 22, 2018. REUTERS/Aaron P. Bernstein

(Reuters) - Shares of Time Warner Inc TWX.N look appealing based on their underlying value and on the strong chance that AT&T Inc T.N will win approval for its $85 billion acquisition of the company, according to the March 26 edition of Barron's.

AT&T squared off with the U.S. Justice Department on Thursday in a long anticipated antitrust trial, as the two sides disputed whether the company’s purchase of Time Warner would be good for consumers or an expensive drag on innovation.

Time Warner’s stock price ended Friday around $11 below AT&T’s bid price of $103.60 a share, Barron’s said.

“That’s a 12 percent spread, which is appealing, given that many observers see AT&T prevailing over the U.S. government and completing their merger around mid-year,” the financial newspaper said.

Even if the government ends up winning and the deal dies, Time Warner shares might fall $5, but some analysts think they would quickly recover to their current value, given the company’s earnings power, Barron’s said.

Time Warner investors could end up even better off if the deal does not go through because the company’s earnings power could support a higher stock price than the deal’s current value, the newspaper said. It added that a Deutsche Bank analyst has a 12-month price target of $120 for the company on a stand-alone basis.

The antitrust trial is expected to last six to eight weeks.