American Express Company, Royal Bank of Scotland, Capital One Financial Corp., DFS and Wells Fargo & Co.

CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: American Express Company (NYSE: [ AXP ]), Royal Bank of Scotland (NYSE: [ RBS ]), Capital One Financial Corp. (NYSE: [ COF ]), DFS (NYSE: [ DFS ]) and Wells Fargo & Co. (NYSE: [ WFC ]).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: [ http://at.zacks.com/?id=4579 ].

Here are highlights from Monday?s Analyst Blog:

AmEx to Bid for RBS Unit

American Express Company (NYSE: [ AXP ]) and UK-based private equity house Permira are jointly bidding for Royal Bank of Scotland?s (NYSE: [ RBS ]) payment processing division, the Financial Times reported yesterday. If closed, the deal could raise around $3.6 billion.

The experience of AmEx in processing payments for millions of customers could help the RBS division to expand in emerging markets.

AmEx?s cash position showed a balance of $21.0 billion as on March 31, 2010, amply demonstrating the financial capability of the company to participate in the bid.

AmEx made the significant acquisition of Internet-based payment service provider Revolution Money in January 2010. This deal is expected to provide AmEx an innovative technology platform to extend its leadership beyond the traditional payment fields. During the first quarter of 2010, the company also returned $216.0 million in dividends to shareholders.

The company?s liquidity plan helps it overcome financial obligations. Its funding strategy and activities help it arrange funds for participating in financial activities.

Other bidders in the pipeline include Moneris, the Canadian card payment company, and pure private equity buyers TPG, Warburg Pincus and a consortium of Advent International and Bain Capital.

The company?s closest peers, Capital One Financial Corp. (NYSE: [ COF ]) and DFS (NYSE: [ DFS ]), have not been involved in any acquisitions in the last quarter.

AmEx?s first quarter earnings of 73 cents per share from continuing operations were much ahead of the Zacks Consensus Estimate of 63 cents. This also compares favorably with earnings of 32 cents in the prior-year quarter.

Earnings improved from the prior-year quarter, primarily due to higher revenues as a result of increased cardmember spending and a decline in provision for credit losses. However, the downside came from increased expenses on account of business building initiatives and higher rewards costs, miserable real estate values as a result of higher unemployment and an uncertain legislative environment.

Overall, earnings in the reported quarter marked a significant improvement, reflecting a spike in card spending across all segments and facilitating AmEx to participate in the bid.

Wells Fargo Expects Rev Growth

In an investors? conference last week, Wells Fargo & Co. (NYSE: [ WFC ]) disclosed that it is aiming for a 10% growth in revenues per annum. The investors? conference of Wells Fargo which happened for the first time in the last 12 years saw the management detailing the company?s past performances and future opportunities.

Wells Fargo?s 10% per annum revenue growth expectation is based on its cross-selling strategy. The company plans to achieve this growth by applying its legacy Wells Fargo cross-selling model to the Wachovia customer base.

Wells Fargo?s wealth business also aims to increase its share in the company?s total revenue. This division, which now accounts for around 14% of the company?s total revenue, plans to boost the contribution to the range of around 20% to 25%, with an increase in client assets by 20% to $1.5 trillion in the next three years.

The integration of merged Wachovia remained on track and is expected to realize $5 billion of annual merger-related savings upon completion of the integration process in 2011. The company has achieved 70% of this targeted consolidated run-rate savings. Wells Fargo expects the balance to be in a run rate by the middle to the latter part of 2011, when it finishes converting the remaining Wachovia stores in the East.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: [ http://at.zacks.com/?id=5514 ].

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: [ http://at.zacks.com/?id=5516 ].

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at [ http://at.zacks.com/?id=4580 ].

Visit [ http://www.zacks.com/performance ] for information about the performance numbers displayed in this press release.

Join us on Facebook: [ http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts ].

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

N@N

American Express Company, Royal Bank of Scotland, Capital One Financial Corp., DFS and Wells Fargo & Co.