At least 12 brokerages raised their price targets on the stock after Nike reported better-than-expected quarterly results on Tuesday, benefiting from higher discounts and strong demand in North America.

"Nike's second-quarter performance proves the brand remains strong, margin drivers are intact and global demand is healthy," said Jefferies analyst Randal Konik, who was the most bullish and raised his price target by $25 to $140.

In September, Nike said its inventories ballooned 44% to nearly $10 billion at the end of the first quarter and warned of weaker margins, stoking fears across the industry that consumers were cutting back on discretionary spending due to soaring inflation.

"We believe the inventory peak is behind us as actions we're taking in the marketplace are working," Nike Chief Executive Officer John Donahoe said on a post-earnings call on Tuesday.

While Nike's quarterly inventory declined about 3% from the prior quarter, margins fell 300 basis points due to higher promotions and discounts.

Still, the decline was smaller than expected, according to analysts, thanks also to higher-priced product launches such as the LeBron 20s and Nike Mercurial shoes.

"Nike offered promotions, but at the same time, they also pushed for new product without the promotion," said Jane Hali & Associates analyst Jessica Ramirez.

Nike saw sales in North America surge 30%, while in China - where the business was recovering from lockdowns - fell only about 3%, following a 16% slump in the first quarter.

The company's shares, which have fallen about 38% this year, were at $114.82 in premarket trading, while European peers Adidas and Puma also rose nearly 7% and 9%, respectively.

(Reporting by Aishwarya Venugopal and Deborah Sophia; Additional reporting Ananya Mariam Rajesh in Bengaluru; Editing by Maju Samuel)