Manchester City manager Pep Guardiola believes the English champions are still not strong enough at either end of the field to count themselves as realistic contenders to win the Champions League for the first time.

City are the bookmakers’ favourites to finally win the biggest prize in European football after more than a decade of huge investment from the club’s Abu Dhabi owners and in Guardiola’s fourth season in charge.

However, the Catalan, who has won the Champions League twice as a manager and once as a player at Barcelona, thinks City will be punished in the latter stages of the competition if they continue the inconsistent form they have shown so far in the Premier League this season.

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“We miss a lot of chances in the final third and we have to do that, to be clinical. When the people say about the Champions League being the target, we are still not ready,” said Guardiola, whose side have won their opening two Champions League games and host Atalanta at the Etihad on Tuesday.

“In this competition you have to be strong in the boxes and this season we are not incredibly strong in the boxes. Of course we have time.”

City have been beset by injuries in defence and suffered shock defeats to Norwich and Wolves in their opening nine Premier League games.

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Guardiola, though, believes the onus is on his side to attack well as a unit to mask any defensive failings. “When you play good, you defend less. When our build-up is bad, when you don’t play good, you concede a lot,” he added.

“What happens when we make our incredible, fluid game from the build-up? We concede few (chances). When our build-up is wrong, we make mistakes in the first pass, we are nervous like what happened against Wolves...we concede a lot.

“That’s why it’s related. It’s not that you play well in one department and it’s enough. When our pressing is high, is intense, we concede really few (chances).”

Guardiola will at least have more defenders to choose from for the visit of the Italians in midweek with Nicolas Otamendi and Kyle Walker returning to training after missing Saturday’s 2-0 win at Crystal Palace, while John Stones could make his first start in five weeks.