Carvana Co. (NYSE:CVNA) was downgraded to sector perform from outperform by the analysts at RBC Capital. The price target was lowered to $138 from $155. Shares were trading at $121 (down around 9%) Tuesday afternoon.

The analysts said they are no longer able to justify the risk/reward as asymmetrically positive for the company. Acknowledging a significant discount already priced in, the analysts believe (1) the Adesa acquisition raises the downside risk from any perceived demand shortfall, (2) the second derivative on GPU is inevitably negative, while timing is uncertain, and (3) Adesa’s integration in upcoming 2 years+ could be messy.