Nike shares powered firmly higher in early Friday trading as analysts and investors reacted to the sportswear giant's move to replace Chief Executive John Donahoe.

Nike  (NKE) , which has lost around $45 billion in market value this year, is currently trading where it was prior to the Covid pandemic in 2020 and is one of the weakest five-year performers within the Dow Jones Industrial Average.

The company has been suffering from both a pullback in consumer spending in China, a key growth market; intense competition from European rival Adidas  (ADDYY)  and missteps tied to a focus on its direct-to-consumer business over traditional retailers and wholesalers.

The group launched a $2 billion cost-cutting plan last year aimed at boosting underlying profit margins and reviving moribund store sales. But it failed to capitalize on a summer of high-profile sporting events, including the Paris Olympics and the Euro 2024 soccer championships.

Nike forecasts a double-digit slump in overall revenue for its current fiscal year, which began in June, against Wall Street's consensus estimate of a 1% gain, in what it called a "transition year for our business."

The group received some support for its turnaround last month, as the billionaire investor Bill Ackman's Pershing Square Capital Management hedge fund unveiled a stake of around 3 million shares. But many analysts saw the activist's stake as leverage to remove Donahoe as CEO.

Nike's 'next stage of growth'

Late Thursday, Nike said Donahoe would step down next month, with the former Nike executive and 30-year company veteran Elliott Hill succeeding him on Oct. 15.

“I am excited to welcome Elliott back to Nike," said group Chairman Mark Parker.

"Given our needs for the future, the past performance of the business, and after conducting a thoughtful succession process, the board concluded it was clear Elliott’s global expertise, leadership style, and deep understanding of our industry and partners, paired with his passion for sport, our brands, products, consumers, athletes, and employees, make him the right person to lead Nike’s next stage of growth,” he added.

Related: Nike shares swoosh higher after new CEO is named

Wells Fargo analyst Kate Fitzsimons, who lifted her price target on the group by $9 to $95 a share following last night's update, said Hill's return would be a "key catalyst that bulls have been waiting for and should help drive a new narrative for the company."

Baird analyst Jonathan Komp, who raised his price target $10 to $110 a share, said Hill's appointment would likely have a bigger impact on Nike's longer-term earnings prospects as well as the stock's six- to 12-month outlook.

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Hill's uphill battle

Deutsche Bank analyst Krisztina Katai said Hill's return to Nike as CEO "increases our confidence in Nike’s ability to return to sustained growth."

"This leadership change, which was highly anticipated, will likely bring a renewed focus on product innovation, marketing, and rebuilding wholesale partnerships —areas that had been challenged under previous leadership," said Katai.

She carries a buy rating with a $92 price target on Nike stock ahead of its Investor Day presentation on Nov. 19.

Related: Analysts overhaul Nike stock price targets after earnings

"Hill’s strong internal and retail partner relationships should provide an immediate morale boost," she added. "While Nike’s fundamentals remain weak, we believe they will be largely overlooked in the near term."

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KeyBanc Capital Markets analyst Ashley Owens, who carries a sector weight (effectively neutral) rating on the stock, said Hill's "longstanding connection with the company and expertise within the marketing scope is encouraging, as Nike examines reinvigorating brand storytelling."

"We think the timing of a leadership change was relatively within expectations, and note Nike is taking swift actions during its broader restructuring initiative," she added.

Nike shares were marked 6.9% higher in premarket trading to indicate an opening bell price of $86.53 each.

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