UPDATE: Axiom Initiates Sell, $10 PT on United States Steel Corporation

Axiom initiated its coverage on United States Steel Corporation

with a Sell rating and a price target of $10 a share on sliding prices prices and structural cost disadvantages. Axiom said, "With the Flat-Rolled division accounting for 70% of X's '11 EBIT, and our analysis suggesting every +/-1% move in X's hot-rolled steel price impacts underlying earnings by ~$0.44/share, exacerbated by: (1.) the fact the hot-rolled steel prices are down -9% YTD and -6% since X reported C1Q12 earnings 4/24/12, and (2.) X's overwhelming structural cost disadvantage versus its U.S. steel peers due to its overbearing pension liability, which was $5.2bn exiting ‘11 (or roughly 2x its current payroll), we believe as X's Flat-Rolled steel prices approach market rates, the company's earnings will turn negative (an event we expect to occur in C3Q12), due mainly to limited operating leverage, rendering Consensus estimates grossly overstated." United States Steel Corporation closed at $ on Friday.