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NEW YORK (TheStreet) -- Shares of Callaway Golf (ELY) - Get Callaway Golf Company Report  are jumping 5.29% to $11.14 on heavy trading volume late Thursday afternoon after Nike (NKE) announced its departure from the golf business.

Nike said on Wednesday that it would no longer produce golf clubs, balls or bags, and would only offer apparel and footwear for the sport. Nike's sales in the golf business dropped 8% to $706 million for the fiscal year ended May 31.

Nike's exit from the golf market presents upside for Callaway Golf, which now has a greater footprint in a business free from Nike and Adidas (ADDYY).

Adidas announced plans in May to sell its golf equipment brands TaylorMade and Adams as well as its golf apparel brand Ashworth.

"There is a near-term risk that clearance markdowns at Nike could influence margins for the other golf brands such as Callaway - but long-term benefits are bullish," said analysts at Raymond James in a note cited by Barron's.

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Over 2.93 million shares of Callaway stock have traded so far today, surpassing the 30-day daily average of 857,000 shares.

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

TheStreet Ratings rated this stock as a "buy" with a ratings score of B.

The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

You can view the full analysis from the report here: ELY

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