Enbridge (ENB) could meet or beat its 5% growth target as western Canadian oil output rises, pipeline expansion demand improves, its backlog grows, and its balance sheet supports more investment, RBC Capital Markets said in a note Wednesday.

RBC said higher crude production in the WCSB should support lower-cost pipeline expansions such as MLO1 and MLO2 and investors appear less concerned about whether MLO2 will move ahead and win more market share.

Enbridge believes any new west coast oil pipeline would need producer backing, durable permits, and production growth before construction, according to the note.

The company has the tools to keep, and possibly raise, its medium-term 5% growth target for earnings before interest, taxes, depreciation, and amortization, distributable cash flow per share, and earnings per share through the end of the decade, RBC noted.

RBC kept its outperform rating and 79 Canadian dollars ($56.33) price target, saying that Enbridge's $40 billion secured backlog, stronger project returns, and large supplier network should help it manage execution and supply chain risks.

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