NEW YORK (AP) — General Electric Co.’s core industrial businesses are generating enough cash flow to pay off debt and rebuild the conglomerate’s capital base, an analyst said Monday.

Morgan Stanley analyst Scott R. Davis said concerns over the size of losses in the company’s financing arm, known as GECS or GE Capital Services, has kept the share price lower than it should be.

Davis raised his share price target to $19 from $17, saying GECS probably has losses of less than $20 billion — not the $50 billion some investors have claimed.

“Credit investors have largely done a better job than equity investors in seeing changes in the GE story and the sharp decline in GE’s credit spreads is telling,” the analyst said, noting that GE can now finance inexpensively without government backing.

Davis also said the company is pursuing a robust research and development that includes about 50 core breakthrough projects with a primary focus on energy efficiency, environmental and material science.

Finally, the analyst said GE’s shareholder base has evolved in an encouraging way.

“A stock that has lacked sponsorship for quite some time is picking up a strong institutional base of large holders and we think retail investors are regaining interest,” he said.

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