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.
In the Champions League, Arsenal would play as a normal team, winning only a few games before being eliminated. The premier league matches, however, are where their focus and strength would be on to demonstrate that they can win the premier league this coming season after losing to Manchester City last season.
Arsenal is still assembling the team into a formidable one, as we all know, and has not yet attained the status necessary to win the Champions League. They will eventually accomplish that, but it will take them a long year to get the chance to lift the champions league trophy. For this season and the upper one, they are going to place more of an emphasis on the premier league than the champions league.