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Shares of chip giant Intel (INTC) are down 20 cents, or 0.6%, at $35.26, after the company yesterday afternoon held its annual analyst day meeting to outline the trends in its business and its financial goals.

There’s concerns about competitive pressures today, and delays in Intel's production of it’s next generation of chips, with critical feature size of 10 nanometers.

Among highlights, the company’s CFO Bob Swan announced a 5-cent increase in the company’s annual dividend, which stood at $1.04 at the end of 2016. More on Swan’s financial remarks can be found in a deck of slides he used, posted on the Intel investor relations site.

Intel’s head of its server-chip business, Diane Bryant, talked about a 6% growth rate for the business from now through 2021, with the business having perhaps “low double digit” sales growth by 2021.

At the moment, growth is held back — Bryant predicted a “server contraction” for the foreseeable future, perhaps a 5% decline though 2021 — by a “stall in enterprise on-prem server deployment,” she said, and “delays in new product ramps.”

Bryant also said that costs will weigh on the units operating margin.

Bryant’s deck of slides can be found on the company’s investor relations Web site. A replay webcast of the entire presentation is available as well.

The stock has gotten one downgrade today, that I can see, from Canaccord Genuity’s Matthew Ramsay, who cut his rating to Hold from Buy, and cut his price target to $38 from $43.

Ramsay is “impressed” with the presentation, but he also thinks the company is between a rock and a hard place, as he puts it, because it has so much investment to do to get to better set of markets:

It was hard not to walk away impressed with the results delivered in 2016 and a largely new management team set to deliver on the promise of diversification from a PC-centric company. However, we left feeling Intel is caught between the proverbial rock and a hard place. Should management invest heavily into competitive new markets for growth that may prove margin-dilutive or focus to protect its traditional high-margin PC & data center franchises and reap the cash flow benefits while facing the risks of an increasingly capital intensive future? In the end, we agree with management's long-term decision to invest for growth; however, turning a battleship like Intel takes time and we believe other stocks we cover will generate more attractive returns during this period of prolonged transition, especially exiting a year with "peak" PC margins and into a period of DCG margin compression and increased capital investment. We concede Intel shares generate a strong yield and remain inexpensive, but we believe shares could remain range bound as margins stagnate and until investors see proof of new investments in 10/7nm, automotive, IoT and memory are capable of generating strong returns within a reasonable time horizon.

Ramsay leaves his numbers for this year pretty much unchanged, at $59.75 billion and $2.80 per share, but cuts his numbers for next year to $60.76 billion and $2.90 from $60.78 billion and $2.94.

Joseph Moore of Morgan Stanley reiterates an Equal Weight rating on the shares, and a $38 price target, writing that the “main surprise” for him was that "4th generation 14 nm part will be the volume PC CPU for 2017, with only nominal 10 nm this year."

“This is a setback for client, data center refresh cycles, and foundry potential,” believes Moore.

This is not good for Intel’s competitive position relative to Advanced Micro Devices (AMD), he writes:

We were surprised to see Coffee Lake, the 4th generation 14 nm part, added to the roadmap late last year, but expected it to complement 10 nm products. But Intel basically conceded that this will be their go-to-market product for Christmas, the 8th generation Intel processor family - though they did tell us that there will be client product out this year on 10 nm, the volume will be mostly next year. 4 generations of 14 nm is certainly a surprise, and if there is minimal volume of 10 nm this year, it's really effectively not a 2017 process […] There are two reasons to put the 2017 focus on the 4th generation 14 nm part, instead of the 10 nm part, and neither of them are positive. The most likely rationale is that 10 nm volume is simply available too late in the year to hit the back to school/holiday market without disrupting the supply chain; In the 2014 launch of 14 nm, a late launch proved to be disruptive. The other explanation, which seems more what the company is describing, is that it's simply more economic, given mature yields on 14 nm - but to us, this suggests that the performance and cost benefits of 10 nm aren't playing out as quickly as expected. While a mature process yield would help margins in 2017, it certainly would extend the competitive window for AMD's Zen, which looks to be competitive with Kaby Lake and potentially also Coffee Lake (which Intel claimed was 15% better performance than Kaby Lake).

All that "takes away upside functionality, as we continue to see the cash flows of the core business remain intact."

Craig Ellis with B. Riley & Co., who has a Buy on the shares, and a $44 price target, explains the strategy of Intel to invest while maintaining profits, as laid out by CFO Bob Swan:

Swan also set a range of three‐year expectations. These are: 1) low‐single digit sales growth, assuming CCG declines persist while growth businesses rise 10%+, 2) operating income dollars should grow faster than revenue. Getting there means expected modest GM declines will be more than offset by increasing operating efficiency and opex leverage, and 3) lastly, Mgt expects earnings growth to outpace OI and revenue growth (organic basis). Buy‐backs are part of the equation which are aided by expected gains from the ICAP portfolio often exceed $300MM/year. A flat tax rate is assumed, but at the high‐20’s there could be substantial benefit from federal changes, if enacted.

And Ellis notes the high yield on the shares:

In a pleasant surprise CFO Swan announced a +5.0% quarterly dividend increase payable in C2Q (implicitly to ~$0.275). Once implemented the forward yield would rise to 3.1%, near the high end of the peer range. Increased C17 capex (Memory’s ramps) means the dividend payout ratio is >50% on RILY’s estimates, 10 ppt above the 40% return target. Mgt explicitly noted this is a sign of confidence in future growth and FCF. Ahead, Mgt’s goal is to grow the dividend in‐line with PF EPS growth inside of a plan to return 100% of FCF (~40% dividend/60% buyback), the T10‐year practice.