Shares of Callaway Golf (ELY) - Get Report swung higher Wednesday after an upgrade by analysts at Raymond James that cited the growing value of the sports equipment company's investment in a golf-themed restaurant chain.

Callaway's stock price jumped 3.09% to $18.85 after Raymond James raised its rating on the golf company's stock to outperform from market perform.

Analysts at the brokerage firm cited both the strength of its core golf equipment business as well as the rising value of Callaway's stake in privately held TopGolf, a fast-growing restaurant sporting a golf theme.

Raymond James analysts, who have put a price target of $21 on Callaway shares, pegged the golf company's initial stake in TopGolf in 2017 at $290 million, or 14% of the restaurant chain's overall value of $2.1 billion.

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The restaurant chain, which in the process of expanding to 130 locations, up from 50 now, has grown rapidly over the past two years and is now worth $2.6 billion, boosting Callaway's stake to $362 million, or $3.85 a share.

"Our more constructive view of the stock is based on our belief that ELY's stake in TopGolf is not being fully reflected in the shares, and the company has intimated that it is increasingly open to monetizing this investment," the Raymond James analysts noted.

Analysts also think Callaway has been "overly penalized" for the golf company's acquisition of outdoor apparel brand Jack Wolfskin, which recently caused the golf equipment company to lower its outlook for 2019.

"We believe investor concerns over the recent acquisition of Jack Wolfskin, while understandable, are well priced in at current levels and obscuring the health of the balance of ELY's portfolio," the analysts write.