BHP Billiton's crumbling share price is under fresh pressure after JPMorgan downgraded its rating and share price target, saying the company will need to cut its dividend by 50 per cent next year.

JPMorgan is the first of the analysts covered by Bloomberg to capitulate from the optimistic hold and buy ratings since questions about the company's ability to maintain its progressive dividend policy emerged amid sharp falls in its share price this year, made worse by the tailings dam disaster at its joint venture mine in Brazil.

BHP sees oil and gas markets improving. Credit:Peter Braig

Until now just one other analyst, Andrew Hines from Commonwealth Bank, had a "sell" recommendation on the stock.