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

What: Shares of Analog Devices (NASDAQ:ADI) fell 3% this morning after Wells Fargo downgraded the semiconductor company from outperform to market perform.

So what: Along with the downgrade, analyst David Wong planted a valuation range of $48-$57 on the stock, bracketing the previous closing price of $50.93. While Wong remains optimistic about a rebound in semiconductor demand, he believes Analog's valuation already take into account much of the upside.

Now what: Wells thinks Analog's risk/reward trade-off is pretty balanced at this point. "We expect that semiconductor demand will pick up as 2014 progresses and that chip industry growth for the full-year 2014 might be in the range of 8-12%, representing acceleration from 4-6% growth in 2013E," noted Wells. "Nevertheless, we think that an expectation of improving fundamentals is already to a large extent assumed in the stock prices of many chip stocks, including ADI." With Analog up about 20% from its 52-week lows and trading at a 20-plus P/E, it's tough to disagree with Wells' cautious stance.