Nike (NYSE: NKE) shares rose by as much as 2% on Thursday after Goldman Sachs analysts upgraded the stock from “neutral” to a “buy” rating.

"We believe Nike is a unique asset, where a strong brand combined with a disruptive and innovative strategy are positioning the business for multi year growth, expansion in margins, and higher returns on invested capital," analysts led by Alexandra Walvis wrote in a note to clients.

Goldman Sachs expects Nike to witness immense growth directly from China, which could possibly be a key driver for the Company.

In particular, Nike’s brand is particularly appealing and favored by the teenage demographic in China. Goldman highlights that Nike should expect support from growing purchasing power among younger consumers.

Goldman Sachs estimates that direct-to-consumer is the biggest driver for Nike, potentially reaching 50% of the region’s revenue by 2023.

"Evidence of building pricing power, signs of operating leverage, accelerating shift to differentiated retail, sharply scaling app ecosystem, and a constructive global athletic growth backdrop," are the key motivations for the upgrade, said the note.

Despite ongoing tensions between the U.S. and China regarding a trade agreement, Nike has been able to perform well this year. Nike shares have gained 28.1% this year.