Here's a discussion on the downgrade. Bottom line: priced correctly.
forbes.com
I don't think so, not at the p/e presently in place.
A bit more on the downgrade from the Forbes link:
The sharp move in sector performance has already lifted valuations to levels that largely capture the higher earnings capacity of the stocks," Leggate said.
Leggate told his clients that share price appreciation for these companies has benefited from a number of transitory factors that have inflated earnings expectations beyond levels that can be repeated.
Specifically, Leggate wrote, low U.S. gasoline inventories owed more to depressed imports than domestic refinery problems, an issue he said will improve in coming weeks.
U.S. gasoline production, Leggate said, remains close to a record. The second-quarter is shaping up, he added, as a record quarter but one that likely marks the peak for 2007.
Strong performance since the start of the year has eroded value opportunities for investors, Leggate said. And, against this backdrop, he prefers to stand aside and seek a better entry point for a sector that is notoriously volatile, and avoid the risk that lower seasonal margins translate to lower valuations for the U.S. refiners.
I think this captures the reality a lot better:
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