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.
Pep spent a lot of money over the winter and summer, he had chances to turn things around, but in the end this season ends without titles for him. If you really believe in City, now is the time to place a bet on them - bookmakers are pricing them in at 3.20 to win the Premier League title. Personally, I think Pep won't be able to bring back that City, at best they will have equal chances with Liverpool.