The AstraZeneca (LSE:AZN) share price just dipped below £100 per share. The stock has seriously underperformed in recent months, falling from above £130 in August.

So, let’s take a look at what’s being going on and explore whether investors are looking at an opportunity to buy stock in this British pharma giant.

China controversy

AstraZeneca’s shares slumped in early November following reports of an expanding insurance fraud investigation in China involving numerous senior executives.

The probe, described as the largest insurance fraud case in China’s pharmaceutical sector in recent years, has implicated dozens of AstraZeneca staff, including China President Leon Wang.

The investigation has broadened to include various Chinese authorities, raising concerns about the company’s operations in its second-largest revenue market.

AstraZeneca has stated that it will cooperate with Chinese authorities, but hasn’t commented on the allegations.

Targets under scrutiny

The news has sparked worries about the stability of AstraZeneca’s sales in China, potentially impacting its goal of reaching $80bn in global revenue by 2030.

China contributed around 13% of total revenue in 2023 — AstraZeneca’s largest market is the US, followed by China, with Europe rounding out the top three.

Moreover, the country’s large population and expanding healthcare sector offer substantial opportunities for AstraZeneca’s oncology, biopharmaceuticals, and rare disease portfolios. It’s a central growth market as AstraZeneca looks to transform revenues, which stood at $45.8bn in 2023.

To achieve its revenue target, AstraZeneca plans to launch 20 new medicines by 2030, many of which have the potential to generate over $5bn in peak-year revenue. 

The company’s strategy involves developing treatments for at least half of all potential cancer types and pursuing alternatives to traditional treatments like chemotherapy and radiation.

The Trump effect

While the broad movement has been downwards, AstraZeneca stock pushed slightly higher after Donald Trump’s election victory. While I’ve read some mixed opinions, it appears his win is seen as modestly positive for the pharmaceutical industry, including AstraZeneca.

For one, his administration is likely to be more accommodating to mergers and acquisitions, potentially deprioritising the Inflation Reduction Act, and adopt a less aggressive stance on drug pricing.

However, uncertainty remains regarding FDA independence and the potential influence of anti-vaxxer Robert F. Kennedy Jr. on healthcare policy. In fact, as I write, a number of articles have just been published noting widespread concern about Kennedy.

The bottom line

It’s fair to say that there’s a lot going on which isn’t related to earnings or drug development. That’s going to make one of the most expensive stocks on the FTSE 100 pretty volatile.

However, pushing through the noise, the current forecasts and valuation data looks pretty strong. Sales are expected to rise to $52bn this year and earnings are forecasted to shoot up to £5.50 per share (up from £3.81).

In turn, this means the stock is trading around 23 times forward earnings, a figure that falls to 19.2 times and 17 times in 2025 and 2026 respectively.

I think it’s worthwhile being wary of the impact of this China investigation, while recognising that this could be a rare chance to pick up AstraZeneca stock on the cheap.

Personally, I’ve owned AstraZeneca shares for a while, but may hold back on buying more for the time being. Let’s see how things pan out.