Merriman Curhan Ford is upgrading Cree Inc (CREE) from Neutral to Buy this morning, saying the LED outlook is getting brighter.

Hat tip to StreetInsider.com for the following analyst comment:

“Cree recently raised its June quarter outlook and we believe the company could meet or exceed the high end of its recently revised guidance. LEDs are rapidly replacing CCFLs in TV backlighting and quickly gaining acceptance in the general lighting market that is benefiting Cree in both the near and long term.”

The firm believes Cree could exceed $1 billion revenue withing 2-3 years and thinks CREE should trade at 35-38x our FY11 EPS estimate of $1.12 for a $39-$43 price.