Jefferies has lowered its ratings on refiners Valero (ASX: VLO) and Marathon Petroleum (ASX: MPC) from "Buy" to "Hold," setting target prices of $401 and $413 respectively. The move comes as both companies' stocks have more than doubled over the past year, leaving valuations looking rich.

Analysts led by Lloyd Byrne at Jefferies noted in a report: "There is no clear resolution to tight refining fundamentals... What could disrupt the current cycle? We believe refined product prices need to rise further and stay elevated to trigger demand destruction, otherwise government intervention may become necessary."

They added: "Investors are focused on the possibility of a U.S. refined product export ban ahead of the midterm elections, with political support for such a measure growing. While this would be detrimental to global stability and have economic repercussions for the U.S., given the increasing emphasis on national interests among major powers, the U.S. could follow suit."

Byrne believes the risk-reward profile for refiners supports maintaining current positions while waiting for market volatility to present additional accumulation opportunities. Even with forward prices staying elevated through 2029, current share prices still imply mid-cycle 2030 margins close to 2025 levels.

At Tuesday's U.S. market close, Valero fell 4.10% to $377.14, though still up 135% year-to-date. Marathon Petroleum dropped 3.16% to $389.68, yet remains up 142% for the year.