Nike (NKE) shares soared 5.13% in after-hours trading on Wednesday, reversing a trend of struggle that has seen the stock lose over 32% in the past 12 months. The upturn comes on the heels of positive signals from Dick's Sporting Goods' quarterly results and analyst interpretations of what they mean for the sports apparel giant.

Jefferies analysts highlighted several positives for Nike from Dick's Sporting Goods' earnings call. Dick's executives expressed satisfaction with their Nike partnership and excitement about the brand's new running and lifestyle gear. They also reported strong performance in footwear, a key category for Nike. Moreover, Dick's CEO Lauren Hobart stated she expects "minimal overlap" with Nike's resumed direct selling on Amazon, alleviating concerns about potential channel conflicts.

The unexpected surge in Nike's stock price reflects investor optimism about a potential turnaround. Jefferies analysts predict that as Dick's expands its customer base and strengthens its footwear business, "Nike stands to benefit from the retailer's momentum." They anticipate a deepening partnership between the two companies, supporting Nike's wholesale recovery and positioning the brand for a "V-shaped rebound" in fiscal 2027. This positive outlook, combined with Nike's efforts to focus more on athletes' needs under new CEO Elliott Hill, appears to have reignited investor confidence in the company's growth prospects.