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 Time Warner Inc (NYSE:TWX.DL) slipped about 1% in premarket trading Wednesday after Cowen downgraded the media giant from outperform to market perform.

So what: Along with the downgrade, analyst Doug Creutz reiterated his price target of $77, representing about 11% worth of downside to yesterday's close. So, while momentum traders might be attracted to Time Warner's buyout speculation-fueled surge of late, Creutz's call could reflect a sense on Wall Street that its valuation is becoming a bit stretched.

Now what: According to Cowen, Time Warner's near-term risk/reward trade-off is rather unattractive at this point. "With shares having run up over 20% on news of Fox's bid, short-term share performance will likely be dictated by how [Twenty-First Century Fox] proceeds," said Creutz. "We still like Time Warner's fundamental position, but see potential upside from any higher bid by Fox as offset by the possibility that Fox will not succeed/and or decide to walk away." With Time Warner shares up more than 25% during the past month alone, and trading at a P/E of 20, it's tough to disagree with Cowen's cautious stance. 

Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.