Shares of the United States Steel Corp. (X) - Get Report tumbled today after Axiom senior analyst Gordon L. Johnson predicted a significant slashing of 2017 earnings guidance.

The stock fell nearly 6% to $20.58 on Wednesday, with most of its losses coming in the first ten minutes after the market opened. The stock edged back up to 21.26 by 10:20 am before falling further.

Johnson predicted the company would cut its 2017 EBITDA forecast by about 28%, to $796 million, when it releases its second-quarter results later this month or in early August. Ebitda measures earnings before interest, tax, depreciation, and amortization.

U.S. Steel stock could take a hit if it cuts its earnings guidance. When the company cut its forecast by 15% in the first quarter of 2016, the stock fell 27%.

Johnson's prediction is based on a formula that considers the change in the spot price of hot rolled coil steel. Hot rolled steel is used in construction products such as I-beams that do not require precise shapes.

"While, admittedly, there are thousands of moving parts in X's model, and our approach neglects to address X's US Steel Europe ("USSE") and Tubular segments, we believe the accuracy in our approach rests with the fact that, in general, when US steel prices are falling, trends in the energy segment (i.e., Tubular) as well as Europe (i.e., USSE) are also losing ground," Johnson wrote in the note.

The company has predicted U.S. Steel's guidance accurately before. Axiom has predicted U.S. Steel's forward guidance within 96% of the guided number in each of the four predictions they have made in the past, according to Johnson.