Earnings season is under way, and 24/7 Wall St. is looking for companies that will beat or miss earnings. Currently we are zeroing in on the financial sector and have three stocks that Merrill Lynch believes will beat earnings: American Express Co. (NYSE: AXP), Capital One Financial Corp. (NYSE: COF) and Discover Financial Services (NYSE: DFS).

American Express

American Express is expected to have a solid first quarter when it reports earnings on April 16, driven by healthy U.S. billings and loan growth, and stable credit. That being said, the focus remains on the longer term effects of the Costco co-brand loss.

Buybacks should support earnings per share (EPS) with roughly $1.0 billion in the first quarter, based on Merrill Lynch’s forecast. The firm’s $1.39 forecast is modestly above the $1.36 consensus, likely due to lower operational expenditures. The consensus range is wide again at $1.27 to $1.45, which Merrill Lynch thinks is mostly due to differences in expenses and credit costs. The $78 price objective reflects approximately a 14-times price-to-earnings (P/E) multiple to the 2016 EPS estimate.

Shares of American Express were up 0.6% Friday, at $79.63 in a 52-week trading range of $77.12 to $96.24.

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Capital One

Capital One is expected to report first-quarter GAAP EPS of $1.95, above the $1.87 consensus, when it reports on April 23. The above-consensus forecast is likely due to more modest credit card loan attrition than typical of the first-quarter period and a lower expense outlook, given expectations for rebounding growth, healthy credit conditions and seasonally lower expenses.

Merrill Lynch forecast a reserve build of $45 million, which is significantly lower than previous two quarters. Consensus estimates have a larger than normal range of $1.53 to $2.07. If the modest reserve build forecast proves to be significantly lower than reported, or Capital One experiences higher credit costs, the first quarter could prove to be a negative catalyst, as the stock has reacted poorly to previous surprises on credit costs. Overall, Merrill Lynch expects a solid quarter for Capital One. Its $94.00 price objective is based on an 11-times P/E multiple to the 2016 EPS estimate, at the upper end of its historical range.

Shares of Capital One were relatively flat at $80.55 Friday, in a 52-week trading range of $72.63 to $85.39.

Discover Financial Services

Discover Financial Services is expected to report first-quarter earnings on April 21 after the markets close. Merrill Lynch expects Discover’s first-quarter results to show solid loan growth and healthy margins. The EPS forecast is $1.34, above consensus at $1.27. The firm expects solid loan growth to contribute to a modestly higher reserve rate. The forecast range of $1.19 to $1.40 likely reflects differing expectations around credit performance and reserve actions. The $70 price objective is based on an approximate 12-times P/E multiple to the 2016 EPS estimate.

Shares of Discover were up 0.3% Friday, at $57.62 in a 52-week trading range of $54.02 to $66.75.

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In terms of these companies, loan growth should outpace recent seasonal trends, as demand for revolving credit continues to improve given the stronger economic backdrop. Merrill Lynch expects a small uptick in delinquencies and loss rates, though the increase is considered a normalization.

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