Citigroup Expects WMG Revenue To Fall 14%

Citigroup said that it expects Warner Music Group's

4Q10 revenues to fall 14% to $740 MM. “We expect recorded digital sales will grow just 1% during the fourth quarter, versus 9.6% growth in 4Q09,” Citigroup writes. “We expect physical sales to continue to fall, down 20% versus 4Q09.” Citigroup said that it arrived at its target price ($8) by applying a blended EV/EBITDA multiple of 6.2x “to our 2011 EBITDA estimate, which brings us to $5.91 per share.” Warner Music Group currently trades at $5.69.