Headquartered in Dallas, AT&T (NYSE:T) is a telecommunications giant that pays a generous 5.4% dividend yield. Yet, some investors might be worried that T stock will fall, as AT&T will report its second-quarter 2022 earnings results on July 21. They may be concerned about the effects of inflation, but there’s really no need to worry about AT&T.

Granted, the headlines are replete with scary inflation stats. The Consumer Price Index (CPI) print for June was higher than anticipated, at 9.1%. Then, in an inflationary one-two punch, the Producer Price Index (PPI) reading came in at 11.3% for June.

In other words, prices are up for both the consumers and the producers. Will this pose a major problem for AT&T,then?

Seeing and Anticipating Inflation

Here’s a general principle to keep in mind. If you’re reading about it in the news, then executives at major corporations are already well aware of it. Indeed, AT&T CFO Pascal Desroches acknowledged a month ago, “We’re seeing inflation in labor, supplies, energy, transport. So, we’re keeping an eye on it.”

The company’s not just keeping an eye on inflation, but has already taken action to offset its impact. In particular, AT&T raised its prices for certain single-line individual plans by $6 per month. The company also raised the prices of some family plans by $12 per month.

So, Desroches warned AT&T’s shareholders in advance about inflation’s impact on the company, while also pointing out how the company is handling it. It’s entirely possible, then, that investors have already factored inflationary issues into the AT&T share price, as well as their forecasts for the company’s second-quarter earnings results.

What’s Happening With T Stock?

T stock recently traded near the $20 level, though an earnings beat or miss could send the share price higher or lower. Still, the stock looks like a bargain as AT&T’s trailing-12-month price-to-earnings (P/E) ratio of 8.6 is quite reasonable.

Plus, AT&T pays a forward annual dividend yield of 5.4%. That’s a healthy yield for anyone who’s interested in collecting and possibly reinvesting dividend payments.

Meanwhile, at least one expert on Wall Street has high hopes for AT&T as the company gears up for its earnings release. Citi analyst Michael Rollins expects AT&T to report 600,000 net additional subscriptions for postpaid phones in Q2. Analysts surveyed by FactSet, in contrast, are only expecting that number to be 546,000.

Moreover, Rollins anticipates that AT&T will report 300,000 fiber-optic Internet net adds, higher than the 293,000 analyst consensus estimate. Hence, there could be a positive surprise or two in the offing.

What You Can Do Now

The skeptics can always find reasons to worry about AT&T if they look hard enough. Lately, they can point to rising inflation as a concern. It’s certainly an issue, but AT&T’s management is well aware of the situation and is proactive in addressing it.

In the final analysis, AT&T is still a generous dividend payer and T stock continues to trade at a bargain price. Therefore, feel free to add some AT&T shares before or after the upcoming earnings event, depending on whether you’re expecting the company to exceed Wall Street’s expectations. AT&T currently gets a “B” grade in Portfolio Grader.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.