Goldman Sachs is kicking a streaming dog when it's down.

Goldman analyst Eric Sheridan slashed his rating on Netflix (NFLX) shares to Sell from Neutral on Friday, sending the stock off as much as 5% in pre-market trading. Sheridan cut his price target on Netflix to $186 from $265.

"We have concerns around the impact of a consumer recession as well as heightened levels of competition on demand trends (both in the form of gross adds and churn), margin expansion, and levels of content spend and view Netflix as a show-me story with a light catalyst path in the next 6-12 months," Sheridan warned in the new note to clients.

Netflix shares have been under pressure since the company's surprising first quarter subscriber loss and weak second quarter guidance. The stock is down about 70% year to date.

Netflix shed 200,000 paying subscribers in the first quarter, and expects to lose another 2 million in the current quarter. Analysts had been forecasting the company would add 2.4 million subscribers in Q2 before Netflix offered its forecast in April.

Sheridan's changes to his financial model on Netflix suggest the company may have trouble in a recessionary period holding onto customers amid efforts to increase prices and prevent password sharing.

"We are lowering our 2022-2023 revenue estimates to incorporate a greater probability of a weaker macro environment," Sheridan added. "More specifically, we modestly lower our paid streaming subs across every region but incorporate higher average revenue per user levels in the U.S. in 2024 and beyond to reflect Netflix’s initiatives around its ad-supported tier and password sharing."

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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