Analysts at Evercore downgraded shares of Time Warner Inc. to in-line from outperform on Monday, as the stock's discount relative to AT&T Inc. shares has fallen to about 5% from about 15% at the start of the year. AT&T's proposed $85.4 billion deal to buy Time Warner is expected to close before year's end. "We believe the arbitrage spread has compressed enough to warrant a move to the sidelines as the final innings of the deal review approach," lead analyst Vijay Jayant wrote in a note to investors. Jayant said Time Warner's fundamentals remain intact through the end of the year following solid second-quarter earnings results last week in which the company reported better-than-expected profit and revenue. Shares of Time Warner have gained more than 6% in the year to date and almost 30% in the previous 12-month period. By comparison, the S&P 500 index is up nearly 11% in the year and more than 13% in the last 12 months.
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