While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Transocean (NYSE:RIG) slipped 1% on Friday after Pareto Securities downgraded the contract drilling giant from buy to hold.

So what: Despite the downgrade, analyst Andreas Stubsrud raised his price target to $60 (from $55), representing about 10% worth of upside to yesterday's close. While Stubsrud remains bullish on Transocean's fundamentals, he believes that the risk/reward trade-off is pretty balanced at this point given the stock's recent surge.

Now what: Pareto doesn't expect Transocean's operating momentum to slow anytime soon. He noted:

Earlier this week, Transocean projected an additional USD 500m margin expansion by YE2015 on top of the USD 300m projected in annual shore based savings. This is in line with our estimates, and highly realistic with room for further cost reductions in our view. We increase our TP to USD 60 (55) on a multiple expansion and more confidence in cost estimates, but reduce our rating to HOLD on recent share price run.

When you couple that hot price action with Transocean's still-hefty debt load and sensitivity to volatile oil prices, waiting for a wider margin of safety certainly seems prudent. 

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool owns shares of Transocean. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.