Yes, Milan cannot be said to be ready for UCL. If they qualify from the group stage, this is good enough for them. Because they will meet a strong team, especially Chelsea.
Milan joins in a group that is not really difficult this season in the Champions League. They can be expected to qualify for the last 16 considering that Salzburg and Dinamo Zegreb will not be seeded to qualify from the group stage. I think that hope is what can factually convince me because Milan have developed at this time. But I can't be completely sure if Milan can do everything without mistakes because the competition in the group stages is very uncertain and I really can't guarantee that.
But Milan's focus right now shouldn't be on the Champions League, but they should focus on the derby versus Inter which will take place tomorrow. I hope Milan win the derby because only then will they be very motivated to win in the Champions League.