Shares of the athletic retailer Nike (NKE - Get Report) were spiking over 2.3% during pre-market trading on Thursday following an upgrade of its stock at Morgan Stanley to "Overweight" from "Equal-Weight."

"We think the window to buy Nike at the bottom of a cycle is closing. Nike EPS and North America sales growth rates are likely troughing," Morgan Stanley analyst Jay Sole noted. "We believe new Nike products like Air VaporMax, fashion shifts, and Nike's improving-more-rapidly-than-expected speed-to-market capabilities reverse headwinds experienced over the last 18 months."

Sole boosted his price target for Nike to $68 from $56, representing 18% upside from Wednesday's close.

Sole suggests Nike's North American year-over-year sales growth will increase 5% next quarter, over demand for the company's Air VaporMax shoes, which launched in March. He expects the VaporMax to earn $1 billion in sales following his discussions with industry sources and retailers.

"As Nike proves it can deliver winning product innovations and navigate the online transition, we think market fears subside and the stock's P/E [price to earnings multiple] expands," he wrote.

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