Alcoa Inc. (NYSE: AA) continues to try to right-size its portfolio and production of aluminum output. Alcoa already showed that it will cut production and idle plants, and we have word that it will curtail some 147,000 metric tons of aluminum smelting capacity in Brazil.

Sterne Agee issued a flash note on Monday showing that, along with Alcoa’s recent capacity curtailments in Rusal, the company announced it will shelve its plans to open a new 750,000 ton smelter.

Sterne Agee matters here because its Buy rating comes with the highest of all analyst price targets — $15.00 for the stock. The Sterne Agee team pointed out that a new mining investment group, led by the former Xstrata chief executive, has raised $3.75 billion to acquire existing mining operations.

On a net-net basis, the Sterne Agee team said in a refreshed note:

Independently, the continued rationalization of Alcoa’s smelting portfolio is one of the fundamental themes which we believe will drive the stock. However, with the industry following suit global aluminum supply/demand also continues to come into balance which will benefit Alcoa as well. Whether or not the X2 Resources group pursues aluminum assets remains to be seen; however, such a large alternative asset allocated to industrial metals, led by an experienced industry figure, and backed by well known financial entities potentially points growing interest in a maturing cycle.

Sterne Agee sees earnings per share expectations at $0.45 for 2014 and then up at $0.65 for 2015. Those estimates compare to a Thomson Reuters consensus of $0.36 per share in 2014 and $0.61 per share in 2015.

Alcoa shares were up 1.7% at $12.70 in mid-morning trading on Monday. The aluminum giant’s 52-week range is $7.63 to $12.75.

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