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 analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Humana Inc (NYSE:HUM) slumped nearly 1% this morning after Jefferies Group downgraded the health insurer from Buy to Hold.

So what: Along with the downgrade, analyst David Windley planted a price target of $111 on Humana, pretty much in line with its current levels. So while momentum traders might be attracted to Humana's price strength over the past year, Windley's call suggests increasing concern on Wall Street that its prospects are now baked heavily into the valuation.

Now what: According to Jefferies, Humana's risk/reward trade-off isn't too attractive at this point. ""HUM's latest stock surge has driven its share price to our price target (best 1-year return: 65% vs S&P's 22%; 4-month return: 24% vs S&P's 5%)," noted Windley. "We no longer find valuation attractive as the stock is trading at 12.9x 2015E EPS, which is a 30% premium to AET, CI, and WLP, and in line with UNH." When you couple Humana's premium valuation with its sector-lagging revenue growth and operating margins, it's tough to disagree with Jefferies' call. 

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.