Securities broker JP Morgan has initiated coverage of Apple stock, issuing a "neutral" rating.

Despite that neutral rating, the analyst firm is effusive in its praise for the computer company: "The company is now shaping the explosive market for digital music and devices. Apple's innovations are once again changing the face of consumer electronics and its professional customer base is ripe for an upgrade cycle," Forbes reports.

JP Morgan believes though that these positives are already reflected Apple's stock price: "its innovation has no bounds, but its valuation does," it said.

The analyst also believes the education market to be Apple's biggest challenge – and greatest opportunity, but observes that due to the strength of Apple's main competitor in that market – Dell – it will be hard for Apple to regain market share form.

However, Apple's notebook products outsell those from Dell in the US education market.

Industry insiders have told Macworld that IT purchasers in the UK education sector are increasingly opting for portable solutions (and wireless networks), as they need to deploy computing equipment in increasingly crowded small classrooms.

Apple stock closed at $21.54 per share last night.