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 Valero Energy Corporation (NYSE:VLO) fell about 2% this morning after Bank of America downgraded the petroleum refiner from buy to neutral.

So what: Along with the downgrade, analyst Doug Leggate reiterated his price target of $63, representing about 12% worth of upside to yesterday's close. So while momentum traders might be attracted to Valero's price strength over the past six months, Leggate's call could reflect a growing sense on Wall Street that its valuation is becoming a bit stretched.

Now what: According to B of A, Valero's long-term risk/reward trade-off is pretty balanced at this point. "From here, we believe upward earnings momentum that has underpinned a threefold jump in sector valuations has stalled," said Leggate. "From here, we recategorize the US refiners as a trading call reprising the traditional characteristics of the sector and drawing a line under the structural rerating associated with a US crude advantage that has largely played out." When you couple Valero's hot stock price with its hefty debt load and volatile business model, it's easy to understand B of A's cautiousness. 

Brian Pacampara has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.