Real Madrid head coach Carlo Ancelotti has said Manchester City must be considered favourites to win the Champions League this season.

"I think City are favourites," Ancelotti told a news conference on Tuesday. "They have a squad which allowed them to win it last year, which hasn't changed much. There are always surprises, above all in the latter stages, but right now City could be considered favourites."

Madrid's group will see them face Napoli, Braga and Union Berlin as they look to reach the next round.

Obviously [our target is] to get through the group stage, to go through the quarters, and to compete until the end," Ancelotti said. "Making the last four, we can say that without too much pressure, that's a target we can reach."

"I see us as a team that will compete," he added. "We've never thought of ourselves as favourites and I don't think City will either as of today."

The Italian coach confirmed that right-back Dani Carvajal would miss Wednesday's game with a muscle strain, but he refused to rule the defender out of Sunday's LaLiga derby with Atletico Madrid.

"We prefer to rest him to avoid problems," Ancelotti said. "He'll undergo tests tomorrow. He feels quite OK so we think it isn't serious, he could be back soon."