PulteGroup Inc. (NYSE: PHM) is Merrill Lynch's other top pick, and it also projects 24% upside to the $30 price objective. The firm sees it valued at roughly twice a valuation discount to other large cap peers on a 2018 price to earnings (P/E) basis. It also has a best-in-class return on equity over the firm's 2019 forecast period. Pulte's financial results have improved in recent quarters, and the firm believes that 2018 could be a year for reaccelerated order growth. Lastly, the firm appreciates Pulte's disciplined approach to capital allocation, with share repurchases and dividend increases expected to continue.