The price target represents a downside from the stock's closing price Thursday of $17.05.
The firm is bearish on the company's prospects due to increased competition that will create structural headwinds for the Redwood, Calif.-based company. Microsoft (MSFT) - Get Report was viewed as being the biggest impediment to the company's growth.
"While Box's solutions have evolved from basic file-sync and share use cases to more sophisticated cloud content management, we believe Box is increasingly more vulnerable to Microsoft, not only because of an improving competitive product (OneDrive) but also because of Microsoft's resilient growth-at-scale for Office 365 offerings feeding OneDrive," J.P. Morgan analyst Mark Murphy wrote.
A survey conducted by J.P. Morgan revealed that 9% of existing Box customers plan to decrease spending with the company in 2019 on a net basis, compared to a 2% increase that was revealed in 2018's survey.
Mirroring the survey, the company has reported a 50% decline in paid user additions this year vs. the previous two years.
"Our downgrade reflects the expectation of long-term negative impacts from an increasingly competitive environment and therefore headwinds to a materially higher stock price, rather than the expectation of an imminent negative catalyst," Murphy wrote.
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