JP Morgan Downgrades VeriSign Rating

Analyst Sterling Auty says Internet security firm's growth will mirror the sluggish market until an upturn later this year

JP Morgan downgraded VeriSign (VRSN ) to market perform from buy.

Analyst Sterling Auty say he is downgrading for three reasons: 1) Domain name recovery is delayed -- the company forecasted 10% sequential declines for the next two quarters before stabilizing in the fourth quarter; 2) Security growth is limited -- he believes competitive strength milked all there was from the public key infrastructure market, now growth will mirror the sluggish market until an upturn later this year; 3) Restructuring -- consolidation and job cuts will likely take until the third quarter to complete.

Auty reduced his $0.98 2002 EPS estimate to $0.79, and cut his $1.31 2003 estimate to $1.12.