UPDATE: Oppenheimer Upgrades Cree

In a report released Thursday, Oppenheimer analyst Andrew Uerkwitz upgraded Cree CREE from Market Perform to Outperform, with a $59.00 price target.

Uerkwitz states Cree is to benefit from the secular trend of LED lighting. Cree is positioned to gain market share and expand its sales channels as the LED market improves by becoming less fragmented.

The analyst believes that Cree is undervalued due to near-term margin concerns and recent weak commercial market growth. Cree's disciplined operational expenditures is likely to offset margin concerns.

Shares of Cree are up 4.7 percent.