Shares rallied 1.1 percent Tuesday following the Canaccord note.
The analyst raised his price forecast for the stock as well, telling clients that shares could rally to $95 in just 12 months. The new target implies 15 percent upside from Monday's close.
The campaign, released last Tuesday to commemorate the 30th anniversary of Nike's "Just Do it" slogan, drew a deluge of criticism and support from shoppers.
Kaepernick became one of the most polarizing figures in the sports world after he took a leading role in player protests, kneeling during the national anthem to call attention to racial injustice and social inequality.
He has gone unsigned by any NFL team since March 2017.
While Nike shares initially dropped 3 percent after the release of the ad campaign, Nike's online sales jumped. Between Sunday and Wednesday of Labor Day weekend, product orders rose 27 percent, according to Edison Trends, a digital-commerce researcher. In the same period last year, product orders fell 2 percent.
Nikeshares have since recouped all their losses.
Highlighting Nike's new product pipeline as a primary reason for the upgrade, Lyon said stakeholders should expect a reversal of fortune after an underwhelming two years.
"Since last year's announcement of its new 'Triple Double' strategy, Nike has most notably accelerated its product engine as evidenced by a flurry of new innovation," Lyon wrote. "It also has increased its focus on the consumer experience via its SNKRS app, NikePlus membership, and other in store/ online consumer-centric initiatives."
"These elements, underpinned by Nike's transformation to an experientially driven company, combine to form catalysts to sustaining mid-teens earnings per share growth for the next three years, an outlook that is increasingly visible and reflective of F2021 earnings power approaching $4.00."