Jefferies & Co. upgraded its rating on shares of Research In Motion Ltd. (NASDAQ: RIMM) to hold from underperform and raised its price target to $25 from $22.

We believe the share price has finally found a floor after months of misexecution, delayed products, and shrinking market share. Our reasons for the more positive view are: patent values based on recent transactions point to higher sum of the parts; build plans have stabilized; focused on releasing QNX before expectations; and removal of WebOS, said Peter Misek, an analyst at Jefferies.

Based on the recent Motorola Mobility acquisition by Google Inc., Nortel Networks acquisition by the consortium, and stock price activity of InterDigital, it is clear there is significant interest in the market for patents.

By Misek's calculation RIM spent over $5 billion in acquiring and developing its patent portfolio but he believes RIM could monetize its patent portfolio for about $2 billion since many of the patents are uniquely security-related or cross-licensed.

Misek's checks indicate that builds plans have begun to stabilize. He believes that RIM will likely dump features to release new QNX based devices before expectations. While it may not be the superphone he hoped for, he believes it is slightly positive as it demonstrates to investors the ability to execute on time.

The removal of HP WebOS as a competitor increase the low probability that RIM as an ecosystem vendor may recover. Misek's scenario analysis assumes a break-even hardware business, a subscription business run as a cash cow, a monetized patent portfolio, and a $700 million restructuring charge.

The share price calculation then is $3 billion net cash plus $2 billion (patents) minus $700 million restructuring charge plus subscription net present value all divided by 524 million shares outstanding. Misek's new $25 target implies a 2.5 percent annual rate decline and 3 percent annual subscriber decline.

RIM is seeking to leverage the popularity of BlackBerry Messenger (BBM) by integrating a music service. According to CNet, the company has already signed a deal with at least one of the Big 4 record labels. We believe this is awfully late relative to competitors, but given the popularity of BBM, it may help the company gain more traction with the consumer market, said Misek.

RIM stock closed Thursday's regular trading down 3.84 percent at $25.76 on the NASDAQ Stock Market, while in after-hours the stock rose 0.54 percent to $25.90.