(MONEY Magazine) – As recently as last fall, Nike's famous swoosh seemed to be dragging. Its stock had fallen 40%, to $31, earnings were off badly and once-robust Asian sales were barely showing a pulse. The pro basketball lockout was keeping Nike-shod stars off the air. The worst was yet to come: In January, Michael Jordan, hoopster nonpareil and Nike pitchman, announced his retirement.

But wait, what's going on here? By mid-March, Nike stock had rebounded to a new 52-week high, above $60. Well, the NBA is back in business, and Mike has retired from basketball but not from selling shoes (10 Brand Jordan models are on the market this year). More important, Nike is lessening its reliance on $100-plus "marquee" basketball shoes, with soccer and other footwear and apparel lines taking up the slack.

At least four analysts have upgraded their ratings on the stock since January on expectations of stronger orders in Europe and the U.S. for the company's fall lines. Manager Robert Sanborn of Oakmark fund, the biggest mutual fund holder of Nike, with 9 million shares, says investors are realizing again that "Nike is one of the great American brands, as well known around the world as Coke or McDonald's."

In the short term, Nike will improve profits as it closes some factories in Asia and cuts its promotional budget from fiscal 1999's $550 million to $250 million next year. Although Nike and rivals have worked down last year's global inventory glut, many analysts believe that too many stores selling athletic shoes--plus consumer boredom with new styles--will remain persistent problems. Still, Nike should get big boosts in 2000 from two major events: the European soccer championship and the summer Olympics in Sydney.

John J. Shanley of First Security Van Kasper projects a 29% earnings gain, to $2 a share, for Nike's fiscal 2000. "Nike is starting to see an upswing in Asian orders, a positive sign for the long term," he says. "Despite the run-up here, we still think Nike is a buy."

--JERRY EDGERTON