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SAN JOSE, Calif. - Lumentum Holdings Inc . (NASDAQ: NASDAQ:LITE), a $5.1 billion market cap designer and manufacturer of optical and photonic products, has announced that the Science-Based Targets initiative (SBTi) has approved its greenhouse gas (GHG) emissions reduction targets. According to InvestingPro data, the company maintains strong liquidity with a current ratio of 5.36, positioning it well to fund its sustainability initiatives. These targets are part of the company's commitment to align with the latest climate science and meet the objectives of its key customers, which include cloud data center and artificial intelligence infrastructure providers.
The SBTi has endorsed Lumentum's near-term targets, which aim to significantly reduce GHG emissions by 2030. These targets include a 90% reduction in absolute Scope 1 and 2 emissions from a Fiscal 2022 baseline and a 52% reduction per data capacity delivered in Scope 3 emissions from the use of sold cloud and networking products. While the company faces near-term profitability challenges, InvestingPro analysts project a return to profitability this fiscal year, with an EPS forecast of $1.61. Moreover, the company has set goals for 30% of its suppliers and 25% of its customers to have their own science-based targets by Fiscal 2028.
Lumentum's long-term goals have also received approval, supporting the company's strategy to achieve net-zero GHG emissions across its value chain by 2050. This includes maintaining the minimum 90% reduction in absolute Scope 1 and 2 GHG emissions projected for Fiscal 2030 through to Fiscal 2050, and a 90% reduction in absolute Scope 3 GHG emissions within the same period.
Alan Lowe, President and CEO of Lumentum, stated that reducing GHG emissions is a priority for their customers and that the SBTi's approval underscores the company's commitment to sustainability and technological innovation.
The SBTi provides the only globally recognized framework for setting net-zero targets in accordance with climate science. It is a collaboration between CDP, the United Nations Global Compact, World Resources Institute, and WWF, and it aims to encourage companies to halve emissions before 2030 and achieve net-zero by 2050. Despite recent market volatility causing a 24% decline in the past week, Lumentum's stock has shown resilience with a 43% gain over the last six months. For deeper insights into Lumentum's financial health and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, which includes additional analysis and expert commentary.
Lumentum's sustainability efforts and climate action initiatives can be further explored on its Sustainability page. This announcement is based on a press release statement from Lumentum Holdings Inc.
In other recent news, Arista Networks (NYSE:ANET) has been highlighted by analysts at Jefferies as a potential beneficiary of the 'Stargate' AI project, a $500 billion initiative led by OpenAI, SoftBank (TYO:9984), and Oracle (NYSE:ORCL) in collaboration with Microsoft (NASDAQ:MSFT). Arista's existing relationship with Microsoft places the company in a favorable position to capitalize on this significant AI project.
Lumentum Holdings, on the other hand, has seen a shift in business trajectory, with Barclays (LON:BARC) upgrading the company's stock rating and target. The company's estimated earnings per share for the calendar year 2026 have increased to $4.91, according to Barclays. In recent developments, Lumentum has reported exceeding its initial guidance for the first quarter of fiscal year 2025, with revenues reaching $336.9 million and non-GAAP earnings per share at $0.18.
The company's stockholders have approved an amendment to the 2015 Equity Incentive Plan, extending its expiration date to June 23, 2026. Lumentum is also anticipating Q2 fiscal 2025 revenue to be between $380 million and $400 million, with non-GAAP operating margins projected between 5.5% to 7.5%. These recent developments provide valuable insights for investors tracking the progress of these two companies in the tech industry.
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