We're not favorites for the CL anyway. Far from it. We were very, very lucky at Stamford Bridge last season and the game at Stadio Olimpico exposed this team and Valverde. Some of the blame you gotta give the players, but the manager plays a big, a very big part in such things too.
As long as Liverpool and Man City don't suffer major injuries or meet each other those two teams are primed to make it to the CL final. I also believe Atletico are going to be a handful this season with a better first XI + depth.
For me watching their teams play and previous history I would put the top three favorites as Liverpool, Atletico and Man City.