Pep Guardiola shares his thoughts on Arsenal while naming his Champions League favorites.

Pep Guardiola has identified four teams he believes can win the Champions League following Manchester City’s elimination by Real Madrid.

City lost 6-3 on aggregate, with Kylian Mbappe scoring a hat-trick as Madrid secured a 3-1 victory in the second leg of their play-off tie. Carlo Ancelotti’s team, the reigning champions after claiming their 15th title last season, are seen by Guardiola as the frontrunners once again. He also highlighted three other potential contenders but did not include Arsenal, despite their third-place finish in the league phase.

“Of course, Madrid are definite contenders,” Guardiola said after City’s exit. “But there are other strong teams as well. It’s going to be an exciting Champions League season. Madrid are always the favorites, but there are other teams having great seasons. Liverpool have been excellent so far, Barcelona are outstanding, and Paris Saint-Germain, under my friend Luis Enrique, are on the rise. Still, Madrid remain the favorites.”

This marks the third time in four years that City have been knocked out by Madrid in a knockout tie. However, Guardiola admitted that this time, Madrid deserved the win. “The better team won. They deserved it,” he acknowledged. “This season, we haven’t been at our best. In previous seasons, I felt we were stronger than Madrid, but this time, that wasn’t the case. Quality makes the difference in this competition. Madrid dominated possession, showed great energy, were quick on the counter, and pressed effectively. We have to accept it and move forward. Nothing lasts forever. It was tough to carry the 3-2 first-leg loss into this game, but now we must learn from it and focus on the 30 or 40 matches still ahead this season.”

He emphasized the importance of shifting focus to domestic competitions, saying, “We have to aim for the FA Cup, secure a top-four finish in the league, and qualify for this tournament again next season. I have very little to criticize my squad for in terms of their Champions League performances over the years. In past eliminations against Madrid, we were very close—reaching semi-finals and finals. Tonight, however, they were simply the better team, and we must accept that and congratulate them.”

Meanwhile, Arsenal will face either PSV or Feyenoord in the round of 16 after the Dutch sides eliminated Juventus and AC Milan.