July 16 (Reuters) - Shares of Warner Bros Discovery ( WBD )

rose more than 6% on Tuesday after Bank of America

(BofA) Global Research said the company could create more value

for its shareholders if it explored strategic options, including

a potential sale.

The loss-making media conglomerate has been reeling from the

effects of subdued advertising in the U.S. and certain

international markets. The fallout of last year's Hollywood

strikes have also impacted the company's studio segment.

Warner could explore a scenario where it could spin off its

direct-to-customer and studio assets as a standalone company,

BofA said in a note on Tuesday.

This could be a negative for Warner's debt, but could be

accretive to equity value, it added.

BofA added that Warner could explore selling itself or its

streaming services could be merged with another streaming entity

and potentially co-owned.

Since the merger between Discovery and AT&T ( T ) spin-off

Warner Media in 2022, shares of Warner Bros Discovery ( WBD ) have

fallen nearly 70%.

Warner did not immediately respond to a Reuters request for

comment.

"While several financial assumptions behind the combination

of Warner Media and Discovery have not materialized, we still

believe several of WBD's assets are best in class with

tremendous unrecognized value," BofA said.

Fears of market saturation have forced media companies to

bundle their streaming businesses and offer discounted rates to

attract customers who are wary of signing up and paying for

numerous individual services.

Recent media reports also indicate that Warner could lose

broadcasting rights for National Basketball Association in the

next round of negotiations with distributors.

This could add to investor concerns about the media giant's

role in the new sports-streaming partnership with Disney ( DIS )

and Fox.