Paulo Bento’s side are placed in Group B alongside Germany, Netherlands and Denmark and, despite being drawn alongside two of the favourites for the tournament, Wenger believes individual ability may help the 2004 finalists.
"Portugal have the player in Cristiano Ronaldo, but also they have Nani - they have quality players," Wenger told Arsenal’s official website.
|Portugal score consolation goal against Turkey
"They can create a surprise. But because they haven’t done well recently in tournaments, you don’t have them as one of the favourites."
While praising the Portuguese, the Frenchman also admitted he expects Germany and the Netherlands to progress from the group.
"You flip a coin and tell me who will come out of this group," he added. "Holland are the second favourites [for the tournament] with Germany, after Spain. Holland and Germany would be the favourites to come out of the group.
"But because Holland have been in the World Cup final, and Germany have been in the World Cup semi-final, you can’t rule them out of a European Championship. Those two should come out."
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