What happened

Shares of Cleveland-Cliffs Inc. (NYSE:CLF) rallied another 10% by 2:30 p.m. EDT on Monday, continuing their big rally from last week. The iron ore company is up about 35% in the past five trading days. While the company's expectation-crushing second-quarter results initially ignited the rally, an analyst upgrade is driving today's move.

So what

J.P. Morgan upgraded shares of Cleveland-Cliffs from neutral to overweight on Monday. Furthermore, the bank lifted its price target to $15 per share, which is the highest among Wall Street analysts and still more than 36% above its recent trading price. In addition to that upgrade, Citi boosted its price target on Monday from $11 to $12 per share while maintaining its buy rating.

Iron ore loaded into a dump truck.

Image source: Getty Images.

Driving J.P. Morgan's bullishness was the company's strong iron-ore earnings momentum and the removal of the overhang from the anticipated sale of its iron ore assets in the Asia Pacific region, which the company agreed to sell last month. Meanwhile, Citi boosted its price target because Cleveland-Cliffs continues to deliver on its deleveraging plan, which positions it to begin returning capital to shareholders through dividends or a share buyback. Those cash returns could come in the not too distant future, according to comments by management on the company's second-quarter conference call.

Now what

Cleveland-Cliff's efforts to turn around its business are finally paying dividends for investors. Because of that, the stock could have higher to run, especially when it announces its capital return plans. While iron ore is a cyclical business, Cleveland-Cliffs is benefiting from the up part of the cycle, which could still have a way to go before hitting the next peak.