#OneBigBeautifulBill Investing.com - Walmart Stores (NYSE:WMT), Costco Wholesale (NASDAQ:COST), and Target Corp (NYSE:TGT) continue their race to capture a larger share of the rapidly growing U.S. retail media market, which could double to $100 billion by 2028 and represent nearly one-fifth of total advertising spending on media.

Bernstein analysts believe that Walmart Stores has the greatest growth potential, supported by strong momentum in e-commerce and market expansion through third-party sellers.

Analysts wrote: "While we do not expect Walmart Stores to catch up to Amazon's (NASDAQ:AMZN) size in e-commerce or the third-party marketplace anytime soon," they see an opportunity to double the total gross merchandise value (GMV) of e-commerce in the U.S. from $100 billion to $200 billion by fiscal year 2030.

Walmart Stores has already brought most of its direct sellers (first-party) on board, paving the way for retail media growth driven by third-party sellers. Bernstein estimates that the company's retail media revenue could grow from 3% to 5% of total merchandise value, potentially making it a $10 billion business in the U.S.

The team led by Zeihan added: "We see retail media, along with reducing core e-commerce costs, as key levers for Walmart Stores to improve e-commerce profitability and structurally enhance the quality of its earnings in the coming years."

Meanwhile, the Costco Wholesale group is trying to catch up, but Bernstein points to significant growth potential from a low base. Despite structural obstacles - such as a low number of SKUs and the need to maintain a member-first experience - Costco's track record in building alternative revenue sources is reassuring.

Bernstein expects the company's retail media revenue to grow from around $340 million today to over $1 billion over the next five years.

Analysts noted: "Growth in retail media should add at least 10 basis points of lift to operating margins excluding membership (before reinvestment), which is important for a business with a 2-3% margin."

They see room for Costco Wholesale's direct e-commerce penetration to increase from 9% of sales currently to 15% by fiscal year 2029, while expecting its third-party marketplace, Costco Next, to remain limited in scope and carefully curated.

For Target Corp, analysts highlighted the company's advertising unit, Roundel, which already accounts for 9% of total e-commerce merchandise value.

The company aims to double the business to $4 billion by 2029, indicating a high share of 11% of total merchandise value, which is much higher than Amazon's benchmark of 7%. However, while this is supported by Target Corp's largely direct business and strong digital presence, Bernstein points to concerns about sustainability and scale.

Analysts wrote: "We wonder if some of Target Corp's retail media revenues have drained traditional spending on commerce/promotion and whether Target Corp's approach of inviting only Target Plus will limit market and retail media growth in the medium to long term."

Bernstein maintains "overweight" ratings for Walmart Stores and Costco Wholesale stocks, while Target Corp is rated as "underweight."