VeriSign climbs after analyst raises price target

Shares of VeriSign, which runs some of the Internet's core systems, rose 38 cents to $40.14, after earlier spiking as high as $41.

In a note to investors late Monday, Oppenheimer analyst Shaul Eyal increased his price target to $46 from $42 and reiterated his "Outperform" rating for the stock.

The analyst noted that the multiple his price target represents over his 2010 earnings estimate of $2.08 per share is higher than his peers.

However, he thinks it is "justified by margin expansion potential, dominance in domain name registration, a dominant share of the secure socket layer certificate market and near 20 percent top-line growth."

He thinks 2008 will "continue to be a year of divestitures" for VeriSign, which has been working on divesting some of its noncore units.

The company has 12 businesses to sell and has divested three of them thus far, Eyal said. The analyst thinks that these divestitures will help the company's operating margin expand.

For 2009, Eyal now expects VeriSign to report a profit of $1.68 per share, compared with his earlier estimate of $1.66 per share.