TD cuts Warner Bros to "hold", citing negative risk-reward balance after deal chatter-driven gains

** TD Cowen downgrades Warner Bros Discovery WBD.O to "hold" from "buy" due to an elevated risk profile after a share rally on bid speculation

** Warner Bros Discovery's stock down 1.44% in premarket trade to $19.18

** The brokerage says there is a reasonably high probability of a bid for the company, although flags limited pool of suitors, with Comcast facing potential higher regulatory hurdles than Paramount Skydance PSKY.O and Sony likely deterred by the required capital commitment

** A potential deal's rationale would be "at least as much political as business-related," making standard analysis less useful, broker says

** "We don't expect to see other large tech companies choosing to compete with Paramount Skydance (in part because Paramount Skydance's potential synergies with Warner Bros are much higher)," -- TD Cowen

** Brokerage notes that while Paramount Skydance may come in with a $20+ bid per share, it doesn't love the risk-reward here given the potential for Warner Bros shares to quickly drop to $11-$12 if the bid doesn't materialize