Shares of Carvana Co. CVNA, -7.54% were off 3% in premarket trading Tuesday after Wells Fargo analyst Zachary Fadem downgraded the stock to equal-weight from overweight in the wake of an "ugly" earnings report in late April and new updates on financing for the company's pending acquisition of Adesa's U.S. physical auction business. "While we believe CVNA is still on a long-term path to becoming the largest, most profitable used car retailer in this country, the near-term road is proving much less linear than we initially thought," he wrote in a note to clients. "Simply put, we underappreciated the impact of a sharply changing macro, which likely overshadows our expectations for rebounding fundamentals post Q1...and [a] path to gradually improving unit economics." Fadem wrote that while he saw "sound" strategic rationale for Carvana's pending Adesa deal, "the associated leverage" on Carvana's balance sheet is "difficult to ignore." Fadem said that he thought investors would "applaud" Carvana if it opted to move away from the Aseda deal, but he deems such a decision "unlikely at this point." Fadem cut his price target on the stock to $65 from $150. He also downgraded shares of Shift Technologies Inc. SFT, -7.09% to equal-weight from overweight, writing that "macro headwinds are building, capital needs won't come easy, and investor appetite for high growth, FCF-negative companies is likely to remain low." Shares of Carvana have dropped 59% over the past three months, as Shift Technologies shares have lost 28%. The S&P 500 SPX, +0.46% is off about 7% in that span.