UPDATE: Canaccord Initiates Coverage On DIRECTV

DIRECTV's (NASDAQ: DTV) cash-and-stock deal to be acquired by AT&T Inc. (NYSE: T) will yield higher-than expected synergies for the combined companies, an analyst said Wednesday.

Canaccord's Greg Miller initiated coverage on DirecTV with a Hold and $95 target.

Miller expects terms of the deal will result in DirecTV holders getting $28.50 in cash and between 1.905 and 1.724 AT&T shares, depending on AT&T's share at the closing.

AT&T has said it expects the combined companies will save operating costs of $1.6 billion three years after closing. Included in the so-called synergies are programming costs and cutting redundant broadcast infrastructure.

Miller called the estimate "highly conservative" and if the combined companies can better cross-sell their services, "the stock price could track prior large deals."

The Federal Communications Commission has set September 16 as a deadline for comments on the proposed merger. Typically, a decision is made on such mergers 180 days following comment deadlines.

DirecTV traded recently at $86.35, down 0.31 percent.