RETAILING

With American Stores Co.’s purchase of Lucky Stores still entangled in a legal mire, a retail specialist’s report this week cautions that its stock offers little potential to appreciate in price.

The analyst, Edward F. Comeau of Oppenheimer & Co. in New York, cites American’s stalled purchase of Lucky as one reason why the supermarket and drug company’s earnings are likely to lag.

American, which is moving its headquarters from Irvine to Salt Lake City, agreed to pay $2.5 billion last year to acquire Lucky. The plan was to combine Lucky and American’s Alpha Beta chain under the Lucky banner. That move has been held up since September, when a federal court blocked the combination of the two chains--a temporary ruling that is on appeal to the 9th U.S. Circuit Court of Appeals.

Until the merger problem is resolved, Comeau writes, American “will lose $60 million to $70 million in synergistic benefits.” If the merger takes place, Comeau says, “the synergistic benefits initially would be offset by the lowering of Alpha Beta’s gross margin to conform with Lucky’s ‘Everyday Low Price’ program.”

Therefore, he predicts, “a meaningful contribution to earnings would not be likely until 1990 at the earliest. Our 1990 earnings estimate of $5.50-$6 per share . . . is based on somewhat optimistic assumptions.”

Despite American’s high leverage and spotty earnings over the past several years, however, Comeau noted that the stock price is receiving some support from the company’s strong cash flow--estimated at $16 per share in 1989--and high estimated private-market value of $80 to $110 per share.

American’s shares, listed on the New York Stock Exchange, closed Wednesday at $56.50 each.

“We believe the shares are more fairly valued in the $45-$50 range, given the company’s earnings outlook and associated risks,” the analyst concludes.