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Wall Street has turned gloomier on oil prices as signs of weak demand and plenty of supply have weighed on the crude market.

On Monday, Morgan Stanley cut its Brent (BZ=F) forecast for the second time in a month, citing recent price declines that signal the risk of “considerable demand weakness.”

The analysts now predict Brent will average $75 in the fourth quarter of this year, $5 lower than the prior downwardly revised forecast of $80 issued in late August.

On Monday, West Texas Intermediate (CL=F) rose to trade near $68 per barrel, while Brent, the international benchmark, was hovering near $71 per barrel.

“Oil prices have recently followed a path that resembles periods of considerable demand weakness and calendar spreads are already consistent with recession-like inventory builds ahead,” wrote Morgan Stanley equity analyst and commodity strategist Martijn Rats and his team.

Despite the recent price trends, the analysts said “demand indicators are concerning, but it remains too early to make ‘recession-like’ demand the base case.”

Rats and the analysts pointed to willingness from OPEC+ to balance out the market. Last week, the oil alliance delayed by two months the start of some of its voluntary cut rollbacks, originally slated to begin in October.

Other Wall Street firms have also lowered their expectations for crude prices, driven primarily by weak demand out of China, the largest crude importer.

JPMorgan recently cut its fourth quarter forecast from $85 to $80, citing “oil’s large underperformance” in August.

Last month, Goldman Sachs decreased its 2025 prediction for Brent by $5 per barrel to a range of $70 to $85.

Increasing signs of economic cracks in the US and Europe, where the summer driving season has been unwinding, have also weighed on prices. Oil’s downturn has helped precipitate a plummet in gas prices in the US, as well, with at least one analyst predicting the national average would fall to $3 by the end of the year.

Crude recently touched its lowest level of 2024, erasing all of their year-to-date gains.

Despite an overall market rebound on Monday, WTI is down roughly 3% year to date and hovering near its lows for the year. Brent crude is down about 5% during the same period.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

If you’re holding shares of Walgreens Boots Alliance (NASDAQ: WBA) in hopes of it turning around promptly, I think that now is the time to cut your losses on the struggling pharmacy chain and allocate your capital elsewhere. Here’s why.

A common investing thesis for this stock is now dead

One of the criteria that can help an investor decide when to sell a stock is whether the investing thesis they formed as a rationale for buying the stock is still valid.

Let’s assume you bought Walgreens stock 10 years ago, expecting it to be a safe stock that generates steady and growing dividend income, and modest share-price appreciation. You may have also anticipated that its line of business, providing retail pharmacy services, would hold up relatively well over time even if the world changed a lot.

But that thesis hasn’t played out as planned.

In the past 10 years, the total return of the stock has declined by just over 80%. In the same period, quarterly free cash flow (FCF) has dwindled by 53% to just $327 million. In early January of this year, Walgreens slashed its quarterly dividend by 48% compared to the prior quarter, to $0.25 per share.

And in the trailing-12-month period alone, the company spent nearly $27 billion on debt repayment, denying the use of that capital for growth initiatives or for returning it to shareholders.

So, to recap: It wasn’t a safe investment, it didn’t offer consistent dividend income, and even though people still need to go to a pharmacy to get their prescriptions, that factor apparently hasn’t been relevant to preserving the stock’s price.

Furthermore, it is not the case that the pharmacy industry as a whole has struggled, which would at least be a consolation for the stock’s underperformance. Walgreens’ biggest competitor, CVS Health, saw the total return of its shares decline by around 4% in the last 10 years while its quarterly FCF and dividend soared. Take a look at this chart:

So what’s sinking Walgreens? Its core prescription-filling segment continues to hold up relatively well, expanding the number of prescriptions (excluding immunizations) filled by 1.7% year over year as of its fiscal third quarter (which ended May 31).

But sales of nonprescription healthcare goods are softening, as are prescription reimbursements from insurers. The boost the company got as the economy reopened in 2021 is now long past. More importantly, its bid to diversify into providing primary care is costly and although not a money-burner any more, is still nowhere close to contributing enough to prop up the top or bottom line.

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There’s no concrete hope for salvation on the horizon. The only path forward in the near term will be for Walgreens to continue selling off its investments and other assets to service its debt, while trimming operating costs and pushing its most profitable segments forward. Such moves could cause it to leave some revenue on the table. And its total assets will likely continue to shrink, which will drag the share price down more.

Even if you’re patient, it’s time to sell

It’s true that Walgreens could salvage itself over the next decade or more. Eventually its primary care segment could be a formidable profit center. And its retail pharmacy segment could become efficient again, with enough time.

But there isn’t much evidence of those processes getting very far beyond the starting line yet. Nor are shareholders obligated to hang around after their investing thesis is invalidated, regardless of the precise reasons.

Therefore, I think the best move is to sell the stock now. Even if you’re optimistic about a recovery — and it’s hard to see why at the moment — more downward movement of the stock could be looming. It’s safer to back out now, and then return later if you detect the seedlings of a restoration.

Should you invest $1,000 in Walgreens Boots Alliance right now?

Before you buy stock in Walgreens Boots Alliance, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Walgreens Boots Alliance wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

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*Stock Advisor returns as of September 9, 2024

Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool recommends CVS Health. The Motley Fool has a disclosure policy.

1 Healthcare Stock to Sell Now and Never Look Back was originally published by The Motley Fool

You may recall that a few years ago many companies took an nontraditional route to going public. Special purpose acquisition companies (SPACs) — more colloquially referred to as “blank check companies” — became a popular method of pursuing an initial public offering. An influential player in the SPAC boom was a billionaire venture capitalist named Chamath Palihapitiya. Palihapitiya is a prominent technology investor and has a closely followed social media presence, largely thanks to his popular All-In podcast.

Palihapitiya’s support of SPACs may have contributed to the illusion that many of these businesses were lucrative investment opportunities. The unfortunate reality, however, is that many SPAC businesses were far less mature and financially stable than most companies that pursued the more traditional IPO underwriting process. As a result, a lot of money has been lost investing in SPACs.

One SPAC stock that is down substantially from its IPO is an electric vehicle (EV) business called Archer Aviation (NYSE: ACHR). A hallmark of Cathie Wood’s ARK Invest exchange-traded funds (ETFs), Archer develops vertical takeoff and landing (VTOL) EVs.

Is the market underestimating the potential for Archer’s flying taxis, making the pronounced sell-off and $3 stock price a lucrative opportunity hiding in plain sight? Let’s explore Archer’s market potential and assess whether now is a good time to scoop up some shares.

What problem is Archer Aviation solving?

Public transportation is a market ripe for disruption. Ride-hailing apps such as those made by Uber Technologies and Lyft completely revolutionized how people travel, particularly in urban environments. The idea of an on-demand driver who can pick you up and drop you off at a destination brings a level of convenience and solves supply and demand constraints that traditional taxi services simply cannot replicate.

But despite the convenience of calling an Uber or Lyft, there is one problem those companies can’t really solve: getting stuck in traffic. Congested roads aren’t something a ride-share can magically make disappear.

Archer is looking to introduce another layer to urban mobility. Its EVs are essentially air taxis. In theory, this method of travel can lead to fewer cars on the road while serving as a greener form of mobility.

Outside of urban air mobility, Archer also has real opportunities that it’s working on with the U.S. military, as well as with various airline companies.

According to Precedence Research, the total addressable market (TAM) for electric VTOL aircraft will grow at a compound annual growth rate (CAGR) of 12.4% between 2023 and 2032 — ultimately reaching a size of $35.8 billion by early next decade.

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All of these points may inspire some confidence, and give the impression that Archer is destined to land somewhere between Uber and Tesla. Unfortunately, there’s a world of difference between investing in the idea of something and investing in the actual business.

It takes money to make money

For both EVs and aircraft, assembly is an expensive endeavor requiring hefty research and development (R&D) and capital expenditures (capex).

The financial profile illustrated below is a little perplexing upon first glance. Although R&D expenses continue to rise and net losses continue to mount, Archer’s cash balance has risen from its low points. That’s quite peculiar given that Archer is pre-revenue.

There are a couple of ways Archer has managed to keep its liquidity afloat while consistently burning cash. The company has a number of strategic relationships with other aircraft companies. Stellantis, for example, works closely with Archer on the manufacturing side and has been a strong financial supporter of the business.

In addition to these investments, Archer more recently relied on a $175 million private investment in public equity (PIPE) from Stellantis and United Airlines. While this solves liquidity concerns in the short term, the opportunity cost of such a transaction dilutes Archer shareholders.

Should you invest in Archer stock at $3?

As of this writing Archer boasts a market capitalization about $1.1 billion. Since Archer has purchase orders valued at $6 billion, the valuation might look like a steal.

However, I just haven’t bought into Archer’s whole narrative. In general, I don’t think purchase orders carry much value. Considering that Archer is still working with the Federal Aviation Administration (FAA) on its commercialization efforts, and there are question marks about its mass production and manufacturing capabilities, it’s hard to make a case for Archer shares being cheap simply because they’re “only” $3.

On top of that, I think Archer may not fully reach considerable scale. It’s difficult to believe that the same number of people who can afford an Uber will also be able to access a flying taxi if need be; from afar, it looks like a luxury and a niche service. If you’re curious why Archer may compel Cathie Wood, I’m going to theorize that her position in the stock is an industry basket approach since ARK also owns shares of Joby Aviation — one of Archer’s closest competitors.

For all of these reasons, I think Archer is too speculative for most investors right now. While a $3 share price might make the company seem like a dirt cheap opportunity, it’s hard to justify a billion-dollar valuation on a company with zero revenue, high cash burn, outside financial lifelines from larger companies that may eventually turn away, and questionable long-term viability.

Should you invest $1,000 in Archer Aviation right now?

Before you buy stock in Archer Aviation, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Archer Aviation wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $630,099!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of September 9, 2024

Adam Spatacco has positions in Tesla. The Motley Fool has positions in and recommends Tesla and Uber Technologies. The Motley Fool recommends Stellantis. The Motley Fool has a disclosure policy.

Down 69%, Is This Cathie Wood Stock a Bargain for Just $3? was originally published by The Motley Fool

While conventional wisdom might suggest most move to sun-soaked southern states, the reality is more nuanced than that. Florida does make a showing, but the list of top destinations for wealthy transplants spans much of the U.S.

Don’t Miss:

According to CNBC, the Deltona-Daytona Beach-Ormond Beach metro area in Florida tops the list, with a 171% net growth in high-income residents in 2023.

The College Station area in Texas – home to Texas A&M University – claimed the second spot with a 132% increase in wealthy residents.

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California, which has lost residents recently, also made the list. The Santa Maria metro area ranked third, with a 127% net growth in high-income households.

Florida made a second appearance on the list, with the North Port-Sarasota-Bradenton area seeing a 68% increase.

The Midwest also ranked, with Ann Arbor, Michigan – home to the University of Michigan – grabbing fifth place. The college town saw a 63% net growth in high-earners in 2023.

Rounding out the top 10 are:

– Provo, Utah (40% increase)
– Akron, Ohio (35% increase)
– Austin, Texas (34% increase)
– Knoxville, Tennessee (33% increase)
– Fresno, California (32% increase)

See Also: This city is the clear winner of Zillow’s 2024 Home Value Forecast — No surprise as the number of millionaires there grew by 75% in the last decade.

Those migration patterns don’t necessarily align with overall moving trends, though. CNBC’s analysis found that households in the top 20% of earners were the least likely to move in 2023, with only 6.5% relocating compared to 9% of those in the bottom 20%.

Of the high-earners who moved, 53% stayed within the same county. However, when they did venture out, they were more likely than lower-income groups to cross state lines, with 19% of wealthy movers relocating to a different state.

And the motivations behind the moves vary. While middle-class Americans often cited cheaper housing as a reason to relocate, it was a factor for only 6% of high-income movers. Instead, 18% of wealthy movers relocated for new or better housing. Career opportunities also played a role, with 12% of high-earners moving for a new job or transfer.

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Trending: Elon Musk’s secret mansion in Austin revealed through court filings. Here’s how to invest in the city’s growth before prices go back up.

While an influx of high-earning residents can boost local businesses and tax bases, it may also exacerbate housing affordability issues for longtime residents. With remote work continuing to offer flexibility and economic uncertainties persisting, the migration patterns of America’s wealthiest may continue to evolve and impact local communities.

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This article Where America’s Wealthiest Are Moving: Top 10 Cities For $150K+ Earners originally appeared on Benzinga.com

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