The optical component industry is entering the "strongest demand environment since the telecom bubble of the late 1990s," says a Jefferies analyst, who initiated coverage of Oclaro ( OCLR ) with a buy rating and raised his EPS and revenue estimates for Lumentum Holdings ( LITE ). James Kisner set a price target of 11.25 on Oclaro stock. Oclaro on Sept. 21 announced a $15 million stock offering for which Jefferies served as the sole book-runner. "Over the last few years Oclaro's management has transformed the company, shedding several businesses, paying off its debt and focusing on the product areas where it can most differentiate," Kisner said in a report. "This has resulted in a stunning turnaround from years of operating losses to a near tripling of gross margin and double-digit operating margin." Kisner hiked his fiscal 2018 profit estimate for Lumentum to $2.61 per share, which he said was 14% above consensus estimates.