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 Halliburton (NYSE:HAL) traded sluggishly in pre-market trading today after Wells Fargo downgraded the oil services giant from outperform to market perform.

So what: Along with the downgrade, analyst Matthew Conlan planted a price target of $57, representing just 3% worth of upside to Friday's close. While momentum traders might be attracted to the stock's strong surge over the past month, Conlan thinks much of Halliburton's growth prospects are now baked well into the valuation.

Now what: According to Wells, Halliburton's risk/reward trade-off isn't too attractive at this point. "As HAL is now approaching our $56-58 valuation range, we are downgrading the stock to Market Perform from Outperform," noted Conlan. "We are making no changes to our current estimates of $4.02/$5.02 for 2014/2015. The stock is now trading at 7.3x 2014E EBITDA, above its 5-year average of 6.5x next twelve months EBITDA."

When you couple that seemingly stretched valuation with Halliburton's sensitivity to volatile energy prices, it's easy to understand Wells' cautious stance.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.