Ahead of the Bell: JPMorgan downgrades Valero

Analyst Michael LaMotte cut his rating on the San Antonio-based company to "Neutral" from "Overweight."

Valero "is best positioned to weather the current refining margin environment given its leverage to heavy crude and new focus on returning cash to shareholders," Lamotte said in a note to clients.

Refiners have been battered in recent months as crude-oil prices jumped and gas prices were slow to respond. The price for light, sweet crude broached the $120-per-barrel threshold in Monday on the New York Mercantile Exchange.

Yet, LaMotte said, he does not see Valero outperforming integrated oil companies -that find, produce and sell oil -such as Hess Corp. or Marathon Oil Corp.

Meanwhile, Goldman Sachs analyst Arjun N. Murti said Tuesday that investors interested in the refining sector should look to Valero or Frontier Oil Corp. instead of Sunoco Inc.

Shares of Valero fell 60 cents to $48.67 in premarket trading Tuesday.