It's been a tough start to 2018 for Johnson & Johnson (JNJ) .

Barring a recession, shares of the company have not endured a worse start to the year during this century. Through Feb. 27, Johnson & Johnson stock, including dividends, declined 5.2%, RBC Capital Markets wrote in a note. During the same time, the S&P 500 has gained 2.6%.

"JNJ shares trade at a discount to the 5-year average (16.5x), to S&P 500 (17.4x), and the average for large-cap Medical Supplies/Devices peers in our coverage (17.7x)," RBC analysts wrote. "Valuation reflects a lack of confidence in 2018 guidance and awards little recognition to promising new product approvals and an attractive late-stage pipeline."

Johnson & Johnson stock dipped 0.27% to $131.33 on Wednesday.

But it's not all bad for the company, RBC noted.

The company's outlook appears similar to that of last year. In 2017, organic revenue growth totaled 3.2%, which falls within the 2018 guidance for organic revenue growth between 2.5% and 3.5%, RBC pointed out, signaling no real material change for this year.

"Mid single-digit organic growth in Pharma and low single-digit growth in Devices/Consumer segments would be sufficient to achieve 2018 guidance," RBC noted.

Analysts added that blockbuster deals remain an "important growth engine" for JNJ. The company's five big brands are Stelara, Imbruvica, Darzalex, Xarelto and Invega Sustenna/Trinza. Those brands account for 37% of RBC's 2018 Pharmaceutical segment sales estimate of $39.6 billion, up 7% year over year.

In 2017, global sales of those five brands jumped 27% year over year, RBC said. In 2018, analysts estimate that global sales of those "mega-blockbusters" will increase 20%.

Plus, JNJ is making "solid progress" in refreshing its pharma portfolio. Two new molecular entities to treat psoriasis and pre-metastatic prostate cancer were approved over the past eight months at JNJ, and they are expected to contribute more than $500 million to RBC's revenue estimate for the company.

New product contributions will exceed $1 billion next year, RBC said, including treatment-resistant depression drug esketamine. Esketamine is expected to be filed in in the back half of this year and will receive a six-month Food and Drug Administration review.

There are a number of catalysts coming down the pipe for Johnson & Johnson to which RBC pointed: first-quarter results on April 17; investor day on May 16; and efficacy and safety trial data on esketamine from tests conducted this quarter.

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