TiVo (TIVO) shares are gaining ground today after Friedman Billings Ramsey analyst Brian Coyne raised his rating on the stock to Market Perform from Underperform, setting a $7 price target. Coyne advised investors to close out short positions in the stock.

Coyne notes that he had downgraded the stock on January 31 after a rally in the shares following the company’s victory in a patent case against Dish Network (DISH); he says the stock has since dropped 9%. The upgrade, he says, is based on two primary factors. One, he says headlines in the DISH case could be more favorable ahead of a May 30 court status conference intended to push the parties to settle. And two, he says discussions with patent attorneys lead him to believe that the judge may be required to enforce the injunction against DISH’s infringing DVRs regardless of any work-around, “making some sort of payoff more likely.”

All that said, his $7 price target is still 15% below yesterday’s closing price; he’s not exactly a raging bull on the stock. Aside from the DISH situation, Coyne writes that he is “skeptical” on other opportunities, including extending the litigation to other DVR vendors.

Nonetheless, TIVO today is up 36 cents, or 4.4%, to $8.62.