JPMorgan cuts its Netflix stock-price target in half, says the streaming giant has checked every box of its bear case

• JPMorgan slashed its price target on Netflix to $300 from $605 on Wednesday after the company lost 200,000 subscribers in Q1.
• The investment bank said the "sea change" quarter for Netflix underscored its bearish thesis on the stock.

JPMorgan sliced its Netflix price target in half on Wednesday and said in a ratings downgrade that increased competition is among the factors highlighting its bearish view on the streaming service.

Netflix late Tuesday said it lost 200,000 subscribers in its first quarter, the first decline since 2011, while the company's expected to add 2.5 million subscribers. The company also forecast a loss of another 2 million in its current quarter.

Shares on Wednesday tumbled as much as 39% and hit an intraday low of $212.51, the lowest price since early January 2018. That move put shares below JPMorgan's new $300 price target which was halved from $605.

The investment bank also cut its rating to neutral from overweight on Netflix, whose recent hits include "Bridgerton" and "Inventing Anna," joining a slew of other downgrades from Wall Street.

The first three months of 2022 marked a "sea change quarter" for Netflix "in which the company essentially conceded to every key point of the bear thesis," said JPMorgan analyst Doug Anmuth in a research note.

Netflix's management has acknowledged, among other things, a relatively high household penetration rate when including account sharing, increased competition, and a slowdown from gains driven by the COVID pandemic, the investment bank said. Netflix on Tuesday estimated that logins for its service are being shared across 100 million households.

Meanwhile, Netflix is facing competition from major media brands with streaming services. Among them, Disney has its Disney+ platform as well as Hulu, and newly merged media conglomerate Warner Bros. Discovery is home to HBO Max and Discovery+.

JPMorgan said near-term visibility on Netflix is" limited" and that it has slashed its outlook for 2022 net additions in subscribers to 8 million from 16 million.

"[There's] not much to get excited about over the next few months beyond the new, much lower stock price. We're moving to the sidelines as we look for greater confidence in restoring subscriber growth & reaccelerating revenue, while also increasing development velocity in account sharing & advertising," wrote Anmuth.