Yes Arsenal have won only local championships in team history. Maybe they could have achieved the Champions League title in their past when they had great players such as Thierry Henry. Now they are building their future with young and talented players. Arteta has done a really good work with this squad so far. There was a big improvement last season. But it is still doubtful if they can show the same performance in the Champions League as well. It has been a while since they joined this tournament the last time.
But if we see consistency in the Champions League as well they can at least be good enough to get past group stage. It is up to having a good draw as well of course.
I don't see any big hopes for Arsenal in the Champions League next season especially regarding the title. Even though Arteta has built the quality of the team and his game well, I don't think Arsenal are ready to win the Champions League title in the next 1-3 seasons. Arsenal have the potential to win the Champions League title if this team has really good mentality, but so far I don't think Arsenal have.
We all know Arsenal started to prove their worth with Arteta in the last season but I think they need to put in a lot of work and investment before winning the Champions League title. Of course because of that I don't expect Arsenal to be included in the list of favorites next season, in fact they seem to have a low chance of winning the Premier League title.
Arsenal's team is very strong. And the important thing is that due to the good understanding between the team players, their performance is quite stable. However, I still think this team is not the favourite for the Champions League title.
I watched Arsenal's friendly match against Barcelona. Arsenal won the match 5-3. However, several weaknesses within Arsenal's squad were clearly visible. Barcelona players did not attack much. They still managed to score three goals. If Arsenal wants to maintain continuity in the Champions League, then their defence must be strengthened. Moreover, it is very difficult to consistently perform well in two competitive leagues, Premier League and Champions League.