UPDATE: Jefferies Upgrades Echelon to Buy

Jefferies is out with its report today on Echelon (NASDAQ: ELON), upgrading ELON from Hold to Buy.

In its report, Jefferies writes, "We upgrade ELON based on the following: 1) China partnership is new competitive differentiator; 2) best expected topline growth in smart grid for 2012; and 3) limited downside risk at current levels. We modestly increase our PT to $11 on greater conviction in 2012 targets. We are positively biased ahead of earnings: the stock may see near term choppiness in a weak tape, but investors should begin to see 2012 as an inflection point."

Shares of ELON closed Wednesday at $8.10, up 2.14% from Tuesday's close.