Panera Bread Co. (PNRA) was downgraded by analysts on Tuesday before it released earnings, supporting fears of a mass decline in the restaurant industry.

Stifel Financial Corp. analyst Paul Westra noted that recent surveys show a decline in restaurants that could be alarming for not just the industry, but the overall market.

"Today, we adopt a bearish outlook for restaurants as we confidently believe that, at a minimum, the simultaneous -150 basis points to -200bps deceleration of restaurant industry comps across all categories during the second quarter within our most recent Stifel Sales Survey reflects the start of a U.S. Restaurant Recession," Westra noted.

Stifel downgraded 11 different companies, including Texas Roadhouse (TXRH) - Get Report , Dave & Busters Entertainment (PLAY) - Get ReportDarden Restaurants (DRI) - Get Report and ChipotleMexican Grill (CMG) - Get Report  and set the price target for Panera at $175.

But when the company reported earnings Tuesday, investors and analysts a like were pleasantly surprised at least in the short term.

Second quarter earnings released after the bell on Tuesday showed Panera's strategies may be working, as same-store-sales maintained growth. Shares are up 3.83% to $215.57 in mid-morning trading.

Wells Fargo analyst Jeff Farmer noted Wednesday morning that the company's second quarter results "stand out to the upside and demonstrate that the brand's evolution continues to have legs." He added that perhaps the company's initiatives "resonate" with customers.

"Recent data points from across the industry demonstrated a marked sequential slowdown in sales (i.e., MCD, SBUX), with a handful citing an even weaker start to Q3 (i.e., BWLD, BJRI), which is why PNRA's SSS results (both Q2 and Q3-to-date) should impress, in our view," Farmer wrote.

Barclays analyst Jeffrey Bernstein added that shares should outperform this morning, as the company has steadily been able to "maintain momentum" over the last quarter. In addition, Panera should see about 20% growth in the next two years, "before ultimately stabilizing in the 15%+ range long term," Bernstein noted on Wednesday.

TheStreet's Jim Cramer said there's not much to worry about, advising investors to buy Panera. These claims reflect larger ideas about the state of the economy -- and may not be the cause of the decline for the St. Louis-based company, he said.

"I don't like macro calls," he said. "I think Panera is doing some self-help here." 

On Wednesday, Cramer affirmed his call: Panera exceeded expectations and is doing "incredibly well," he said.

"That 'sell' yesterday from stifle just got everybody worried because it was using COMP store sales growth that was much lower than what the company delivered," he said.

Cramer added the company's CEO Ronald Shaich "is doing a great job," before recommending a "buy." 

TST Recommends

More companies are set to release earnings in the next few weeks, which could point to a greater trend for the industry and either quell or encourage caution for the sector.

Starbucks Corp.

(SBUX) - Get Report

released third quarter earnings on July 21 and didn't meet some analysts expectations on U.S. same store sales. Companies like 

The Cheesecake Factory

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Texas Roadhouse Inc.

(TXRH) - Get Report

, and

El Pollo Loco Holdings Inc.

(LOCO) - Get Report

will report earnings within the next two weeks.

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