Foot Locker (FL) is prepared to ride the coattails of serious momentum at key vendor Nike, analysts contend. 

On Thursday evening, Nike reported record sales in North America for its fourth fiscal quarter. Sales surged 141% from last year, and 29% compared to the fourth quarter of 2019 (pre-pandemic). Digital sales soared 147% from the fourth quarter of 2019. Jordan brand sales rose an impressive 31% to $5 billion in Nike's just completed fiscal year.

Shares of Nike exploded 15% on Friday as investors grew even more optimistic on the company's financial prospects over the next 12 months. Nike sees sales surpassing $50 billion for the first time in its current fiscal year, and gross profit margins gaining in the range of 125 basis points to 150 basis points.

And all of that is great news for the folks at Foot Locker, whose stock rose about 5% to $63 Friday in the wake of Nike's blowout earnings day.

"Given Nike is by far Foot Locker's most important vendor, strong brand momentum should ultimately translate to solid growth for Foot Locker. North American sales were up nearly 30% to '19, showing strong consumer demand for the brand. Even with Nike driving outsized growth in its DTC business, as they continue to marginalize non-core retailers, this still leaves plenty of room for differentiated wholesale partners to grow as well," Jefferies analyst Janine Stichter said in a research note to clients. 

Stichter reiterated her Buy rating and $80 price target on Foot Locker shares. 

AMSTERDAM NETHERLANDS – JUNE 27: A woman looks at sports sneakers, including brands such as Nike, Adidas, and New Balance, displayed inside a window of Foot Locker at Kalverstraat, a shopping street, on June 27, 2020 in Amsterdam, Netherlands. (Photo by Yuriko Nakao/Getty Images)

Further benefiting Foot Locker in the near-term is its exposure to online sneaker reseller GOAT. 

The upstart announced this week it raised a new slug of capital at a valuation of $3.7 billion. In 2019, Foot Locker made a $100 million investment in GOAT — an investment that is worth infinitely more now given the platform's growth and latest funding round. 

That puts Foot Locker in the enviable position of sitting on a hearty gain should GOAT IPO or sell out, something that is unlikely reflected in Foot Locker's current stock price. 

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Says Stichter, "We note many under appreciated opportunities for Foot Locker: (1) the strengthening of Foot Locker's relationship with Nike, including the expansion of drop-ship; (2) potential benefits from FLX,(3) Foot Locker's ownership in GOAT which we est. is worth >$5 per share, (4) accelerated growth in women's/kids, (5) new CFO identifying new cost saves, (6) significant return to shareholders given $19 per share in cash."

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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