FBR Capital reiterated a Market Perform rating on Level 3 Communications (NYSE: LVLT), and raised the price target to $56.00 (from $55.00), following the company's 3Q results. Consolidated revenue of $2.1B was in line with the Street's estimates. Adjusted EBITDA of $657.0M were slightly below the consensus expectation of $661.9M.

Analyst David Dixon commented, "Increased investments in network capacity appear to be bearing fruit. Latin American CNS revenues grew 9.1% YOY on a constant currency basis, driven by growth in collocation, datacenter, IP, and data services revenues. EMEA CNS revenues grew 2.2% YOY on a constant currency basis. However, unfavorable FX dampened Latin America and EMEA revenue results to –9.0% and –4.5%, respectively, on an as-reported pro forma basis. While macro and foreign exchange (FX) headwinds are difficult to quantify in the short run, the international business is gaining positive momentum. Similarly, North America CNS revenues grew 5.6% YOY. Furthermore, enterprise CNS revenues were particularly strong in 3Q15 with total YOY growth of 8.8%. Enterprise growth is underpinned by greater investment in IP and data services as customers migrate to hybrid cloud networks. However, (1) our industry checks are highlighting a scaling up of Verizon Edgecast CDN, and (2) we see a growing number of companies migrating to DIY CDN services to reduce costs. While diversified, this could weigh on LVLT's ability to grow CDN revenues in the long term, despite the lower-cost, newly deployed global Ethernet platform. We maintain our Market Perform rating and adjust our price target to $56 from $55."

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Shares of Level 3 Communications closed at $51.89 yesterday.