2024s been a bit of a rollercoaster ride for the AstraZeneca (LSE:AZN) share price. Continued success at the clinical level has allowed the pharma giant to continue growing at an impressive pace. And earlier this year, the business outlined its new ambition to reach over $80bn (£63.2bn) in sales by 2030.
The result of this was a 30% increase in the stock price between January and September. But in the months since, AstraZeneca shares have given back almost all of these gains. What happened? And where do the experts think the AstraZeneca share price is heading in 2025?
Trouble in China
2024 has been a bit of a purge for China. Authorities have been cracking down on corruption in the private sector, with a lot of foreign companies getting targeted by regulatory probes. That includes AstraZeneca, whose China president, Leon Wang, was officially detained at the end of October.
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There’s very little information surrounding this ongoing situation. However, it’s speculated that it could be linked to an ongoing investigation into medical insurance fraud. Already, around 100 ex-employees have been sentenced to prison. And if Wang’s found to be complicit, it could spell a lot of trouble ahead.
Wang first joined AstraZeneca in early 2013. Since then, operations in China have boomed. His strategy has largely focused on localising the supply chain and investing in local startups researching breakthrough therapies.
This granted the firm a more dominant position in the second-largest healthcare market worldwide after the United States. That’s particularly important since China also has an estimated 43% of global lung cancer cases as a result of high air pollution and smoking. Don’t forget AstraZeneca has a huge cancer therapy portfolio. And strong demand from China is a key part of its $80bn revenue target.
With Wang being detained, all of that is now in question. And since shareholders hate uncertainty, it isn’t surprising the AstraZeneca share price has taken a double-digit tumble.
What do the analysts think?
Looking at the latest forecasts, opinions appear to be mixed. The most optimistic outlook, which likely assumes everything in China will be resolved favourably, indicates a potential +70% upside, reaching 18,115p by this time next year. However, should the Chinese probe evolve into criminal charges across AstraZeneca’s executive team, then the stock could collapse by as much as 40%, falling to 6,321p.
China may only contribute around 13% of revenue today. However, it represents a large part of the firm’s long-term growth potential. And an adversarial relationship with Chinese authorities will likely make it very difficult to tap into this massive market.
Still, outside of China, the business appears to be performing well, receiving new regulatory approvals and a steady stream of encouraging clinical trial results. Does that make it a good stock to buy today?
For the long run, I remain optimistic. However, investors seeking to capitalise on the recent share price dip will likely have to brace for more volatility if the situation in China escalates. Personally, I’m going to wait and see how this all turns out before exposing my portfolio to this risk.
