As long as Pep Guardiola is still the coach of Manchester City, I think no one should underestimate Manchester City.
What happened in the Club World Cup tournament cannot be used as a reference and what happened last season was not so bad for Manchester City, they were still able to finish in 3rd place in the final standings and the problem they faced throughout the season was the many main players who were injured which affected the consistency of the team's performance and that is normal for a football team that oversees a long season.
For next season, I still really favor Manchester City to be able to win the Premier League title again, Pep is very experienced and he knows what he has to do, to oversee next season he has made many changes so let's just wait.
I will underestimate them because they haven't really do anything serious from last season. They are already push out of the World cup tournament, what's there to show again if not for the pre season and the season games and it's not like they have made incredible signing of players. I guess they are trying to play by the book not to spend more than what they earned last season, there will definitely be low bookings because they didn't have anything good to show the fans.
We have to wait for preseason matches to be able to see if the team is going to improve or has improved. There is nothing new under Pep administration, the same forward and midfielders, unless he want to make some minor changes and start some players, there is nothing new that he hasn't done last season that he is going to do now. It's Haaland that is going to be their key player, they are going to find replacement of Debruyne, without him there's no playmaker in that team.