Investment bank plays bull and bear on the same industry.

Earlier today, investment bank R.W. Baird downgraded restaurant chains Cheesecake Factory (CAKE) and Texas Roadhouse (TXRH) from outperform to neutral. Both moves were part of the bank's recommendation that investors reduce exposure to casual dining. From the Texas Roadhouse downgrade:

With our preference shifting away from casual dining chains that are sensitive to cyclical swings, we are stepping to the sidelines on TXRH.

From its Cheesecake Factory downgrade:

With our near-term preference shifting away from casual dining chains that are sensitive to cyclical swings, we now view the risk/reward on CAKE as roughly balanced at recent levels (EV/EBITDA 7.6X). We remain confident in the 1long-term outlook for CAKE, but we think the stock could be range bound in the near term, with valuation expansion potentially restricted by cautious investor sentiment amid a choppy macro backdrop.

All of this comes just one business day after Baird was listed as co-lead underwriter on a $75 million IPO proposal for Chuy's Holdings Inc., a private equity-backed operator of 27 Mexican-themed casual dining restaurants. In other words, the bank is asking investors to buy into a market segment that it says is facing a period of stagnation.

Chuy's has stronger year-over-year growth than either Texas Roadhouse or Cheesecake Factory, but the macro risks are virtually identical. In fact, Chuy's lists "declining economic conditions" as its leading risk factor. If Texas Roadhouse and Cheesecake Factory are neutral for factors outside of its control, what makes Chuy's a buy?

A Baird spokeswoman declined to comment, except to point out that IPO filing doesn't mean that the company necessarily plans to price anytime soon. I also put in a call to David Tarantino, the Baird analyst who downgraded Texas Roadhouse and Cheesecake Factory, and will update this post if he replies.