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RBC Capital’s Mahesh Sanganeria yesterday morning raised his rating on Silicon Image (NASDAQ:SIMG) to Outperform from Sector Perform, and increased his price target to $11 from $10. Sanganeria also adjusted his EPS estimates. His 2007 outlook actually dips to 31 cents a share from 36 cents; but 2008 goes to 55 cents from 48 cents.

Sanganeria says the upgrade reflects a “near-term trading opportunity” in Silicon Image, which makes chips used in digital televisions, asserting that he has “increased conviction” that the company can meet or beat his second quarter revenue estimate of $78.5 million and full year estimate of $335 million.

“We expect very limited downside for the stock at the current levels as we believe most concerns are already price in,” he writes.

Silicon Image yesterday was up 15 cents at $9.22.

SIMG 1-yr chart
simg chart 170407